Tax Focus on Advanced Pricing Agreements in Italy

By Giuliana Polacco, Francesco Drago


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 draft of the Budget Law approved by the Government on November 18, 2020 (which must be approved by Parliament before the end of the year) provides for some changes to the APA regulations (art. 196).

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