Menu
  • Locations
  • WTS Global
  • Culture & Career
  • Our Experts
  • Our Services
  • News
  • Knowledge
  • Locations
  • Search
  • Press
  • Events & Webinars
  • Contact
  • CI Guide
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Nepal
  • Netherlands
  • New Zealand
  • Nicaragua
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Seychelles
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
  • Corporate Tax
  • Customs
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office Services
  • Real Estate Services
  • Tax Controversy
  • Tax Technology
  • Transfer Pricing & Valuation Services
  • Latest News
  • Brochures
  • Newsletters
  • Surveys & Studies
  • Subscription
  • COVID-19 Global updates
  • The Digital Tax Law Center (DTLC)
  • VAT Update for the Digital Economy
  • The European Tax Law Center (ETLC)
  • OECD Proposal for a new tax order - Comments
  • Tax Loss Carryback
  • Real Estate Guide
  • Press
  • Events & Webinars
  • Contact
  • CI Guide
WTS worldwide
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Nepal
  • Netherlands
  • New Zealand
  • Nicaragua
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • WTS Global
    WTS Global

    Here you will find more information on our organization’s structure, experts and global reach.

    Read more
    About Us Our CEO Our Board Our Global Executive Team Quality, Process & Risk Management
  • Culture & Career
    Culture & Career

    The WTS Global Academy - Bringing value to the whole

    Read more
    Culture and Leadership Diversity WTS Global Academy Career Your Development
    Jobs
  • Our Experts
    Our Experts

    With a representation in over 100 countries, our team offers local expertise on a global scale. Learn more about our experts.

    Read more
  • Our Services
    Our Services

    Through our global network firms we deliver practical and individualized solutions in all areas of tax. Learn more about our global services.

    Read more
    Corporate Tax Customs Global Mobility Indirect Tax International Corporate Tax
    Mergers & Acquisitions (M&A) Private Clients & Family Office Services Real Estate Services Tax Controversy Tax Technology
    Transfer Pricing & Valuation Services
  • News
    News

    Find here the latest tax news for our locations worldwide.

    Read more
    Latest News
  • Knowledge
    Knowledge

    Our quick overview with downloads: newsletters, publications, surveys. 

    Read more
    Brochures Newsletters Surveys & Studies Subscription COVID-19 Global updates
    The Digital Tax Law Center (DTLC) VAT Update for the Digital Economy The European Tax Law Center (ETLC) OECD Proposal for a new tax order - Comments Tax Loss Carryback
    Real Estate Guide
  • Locations
    Locations

    Our locations worldwide

    Read more
  • Search
Home Italy: Corresponding adjustments made easier
22.06.2019

Italy: Corresponding adjustments made easier

Eliminating economic double taxation may become easier in the future thanks to recent statutory and practice developments

Eliminating economic double taxation deriving from transfer pricing adjustments on transactions with Italy may become easier in the future thanks to recent statutory and practice developments.

Italy has recently introduced new rules concerning dispute resolution and corresponding adjustments. New Article 31(4) of Presidential Decree 600/1973 now also allows the Revenue Agency – upon taxpayer request – to make unilateral downward adjustments, where a foreign tax authority has made a primary adjustment under the arm’s-length principle.

Under the old legislation, downward adjustments were admissible “only to the extent necessary for the application of the agreements concluded with the competent authorities of foreign countries pursuant to mutual agreement procedures foreseen by international conventions against double taxation of income”. The provision dated back to 1988 and was adopted in order to adapt the Italian transfer pricing rules to the (former) bilateral treaty with the USA, the first to include a corresponding adjustment clause.

The common feature of the new and the old rules is non-recognition of compensatory tax adjustments: downward adjustments cannot thus be made by the taxpayer in the tax return (with no accounting records) where a transaction has been adjusted for tax purposes in any other country, either by the other enterprise or by its Tax Authority.

Decision 108954/2018, issued on 30 May 2018 by the Director of the Revenue Agency, provides further details on the new unilateral corresponding adjustments. Activation of the procedure requires the primary adjustment in the foreign country to be final (or at a final stage), and compliant with the arm’s-length principle. The foreign country must also have entered into a treaty with Italy which includes the adequate exchange of information.

The application does not prevent access to other dispute resolution procedures (i.e. a mutual agreement procedure, or the procedures under the Arbitration Convention or the EU Tax Dispute Resolution Directive), the activation of which may be requested using the same form.

The request must include all information on the case, and should attach a courtesy translation in Italian (or English) of the foreign tax assessment. A decision on admissibility is made within 30 days; the procedure must be completed within 180 days, with approval or refusal of the unilateral corresponding adjustment. The Revenue Agency may invite the taxpayer to discuss the issues examined, or require additional documentation when examining such a matter. After each meeting, a copy of the relevant minutes will be provided.

Under the new rules, downward adjustments are also permitted following tax inspections into international cooperation activities, the outcomes of which are shared by the participating countries. An explicit reference to the Arbitration Convention is also included.

Overall, with the introduction of Article 31(4) to Presidential Decree 600/1973, Italy appears to have aligned itself with the international standards set out in BEPS Action 14.

The new rules are expected to reduce the time needed to resolve mutual agreement procedures and lower the number of unresolved cases, as part of a development that has seen significant improvements in Italian cases. The most recent Mutual Agreement Procedure Statistics of the OECD indicate that 48 cases involving Italy were concluded in 2017. The standstill of the past has been overcome, and dispute resolution procedures can now be considered supplementary to domestic court litigation. This brings some changes to the framework of taxpayers’ strategy for meeting international tax challenges.

Article published in TP Newsletter #1/2019
Current developments in the transfer pricing area in 12 countries
View publication
Newsletter Transfer Pricing

With this newsletter, we inform multinational companies on country-specific and international legislative documents and regulations.

Subscribe now
Main Contact
Giovanni Rolle
Partner
Italy
E-Mail
View Profile
Main Contact
Lisa Vascellari Dal Fior
Associate
Italy | SBN
E-Mail
View Profile
Articles you might be interested in

Effective as of 1 January 2019 a group taxation model for corporate income tax purposes has been introduced

Recent developments in Hungarian transfer pricing
read more

The monitoring will be evaluated on an ongoing basis and on 31 December 2024 an evaluation report will be presented

Austria: Horizontal monitoring
read more

New VAT measures focus on B2C supplies of products that are facilitated by entities

Italy: Marketplace to buy & sell VAT fulfilments
read more

Get in contact

If you have any questions about WTS Global or our global services, please get in touch.
We will respond to you as soon as possible.

Contact
About Us
  • WTS Global
  • Our CEO
  • Our Board
  • Quality, Process & Risk Management
Culture & Career
  • Culture and Leadership
  • Diversity
  • Career
  • Your Development
Our Services
  • Corporate Tax
  • Customs
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office Services
  • Real Estate Services
  • Tax Controversy
  • Tax Technology
  • Transfer Pricing & Valuation Services
News
  • COVID-19 Global updates
  • The European Tax Law Center (ETLC)
  • VAT Update for the Digital Economy
  • OECD Proposal for a new tax order - Comments
  • Study: Artificial Intelligence within taxation
  • Study: WTS Global Country TP Guide
Knowledge
  • Subscription
  • ITP Newsletter
  • Global Mobility Newsletter
  • VAT Newsletter
  • Transfer Pricing Newsletter
  • Private Clients & Family Office Services
  • Brochures
  • Tax Loss Carryback
Exclusive Cooperation With
© 2021 WTS Company Information Data Protection Disclaimer