Tax Focus on Advanced Pricing Agreements in Italy

APAs are now well known to Italian companies belonging to multinational groups, which intended (or intend) to agree on the correct remuneration of intra-group transactions with the Revenue Agency, in order to avoid tax audits, assessments, and lengthy tax litigation. It is a way to mitigate conflicts between taxpayers and tax authorities.

Current legislation provides regulations relating to the procedure for unilateral APAs concluded between the Revenue Agency and the entities present in Italy. If the APA also involves tax authorities of one or more States (so called bilateral or multilateral agreements), the procedure followed is that provided for by International Conventions against Double Taxation (art. 31-ter of Presidential Decree no. 600 of 29 September 1973).

The 2021 Budget Law (see art. 1, par. 1101, Law n. 178/2020) introduced some relevant changes to the current APA regulations. 

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