WTS in Italy | WTS R&A

The Italian Tax Agency has issued instructions, through Circular Letter No. 16/E of May 24, 2022, with respect to the correct and practical use of the "arm's length range" for the application of the Italian Transfer Pricing rules.

VAT deduction rules are different during the year and at the end of the year, so particular attention has to be paid in order to properly detect the initial and the final terms for VAT deduction.

In the Tax Ruling n. 162 dated 30th March 2022, the Italian Revenue Agency analyzes the tax regime applicable to proceeds distributed to foreign funds. 

This reengineering process, whose release deadline, for customs declarations for imported goods, is set at 9 June 2022, provides for a radical restructuring of processes to seize the opportunities offered by real “digitization”.

The document analyses the provisions contained in the Articles 6 to 11 of the Legislative Decree 142/2018.

With Circular Letter no. 40/2021 of 14 December 2021, the Agency for Excise, Customs and Monopolies (ADM) has provided some operational clarifications regarding imports made by entrepreneurs not established in the EU.

On 26 November 2021, Italian Revenue Agency published Circular Letter no. 15/E (the “Circular”) providing clarifications on the TP documentation rules contained in the Instruction.

After the expiration of the former authorisation on 31 December 2021, Italy has been authorised until 31 December 2024 to accept e-invoices via SDI only if they are issued by taxable persons established in Italy (Council implementing Decision (EU) 2021/2251 of 13 December 2021).

The Italian supreme court has highlighted two concepts related to the responsibility of the importer in the event that the certificate of origin is proven to be false and the sanctions applicable to the importer.

The Italian tax authorities have recently ruled that the domestic WHT exemption granted to certain foreign investment funds and other qualified investors on interest deriving from medium / long term loans is not applicable to interests paid through an intermediate entity, thus rejecting a “look through” approach.

A change in the interpretation provided by the Italian Tax Authorities.

As part of the initiatives adopted by the Customs and Monopolies Agency (ADM) to support economic operators, the possibility of streamlining the process relating to reintroduction activities for the release for free circulation of previously exported goods was recognised. This relief is granted if the goods are reintroduced in the state in which they were exported.

In commercial practise the ex-works state to the sale of goods intended for export as a delivery term agreed between the seller and the buyer is frequently applied; this condition provides that the seller is only required to make the goods available to the buyer in its own company and it is the buyer who takes care of the transport of the same outside the EU territory.

Article 110 of Decree Law No. 104 of 2020 contains a measure of great interest for companies, introducing the possibility to step-up the costs of tangible and intangible assets in the financial statements. The step-up can be carried out to tangible assets, intangible assets and shareholdings in controlled and associated companies.

In Italy, new rules came into force regarding the structure, content and submission of the transfer pricing documentation. These changes apply to both the master file and the local file and have significant implications for the taxpayer.

Following the 2021 Italian Budget Law, dividends and capital gains deriving by certain foreign EU/EEA UCIs are not subject to Italian taxation, either by way of WHT or substitute tax, starting from January 1, 2021.

In this article you will learn more about the newly introduced withholding tax exemptions on dividends and capital gains in Italy.