Extension of mandatory Masterfile and “upcoming” deadline

da Ylenia Muratore | Lug 19, 2022 | Blog

The November 23, 2020 Revenue Provision intervened on a number of points now established by practice regarding transfer pricing documentation, with which taxpayers will have to interface by the tax return deadline (for solar entities by November 30, 2022).

Among the various items subject to change is the requirement to prepare the Masterfile, a document that contains information about the multinational group and transfer pricing policies as a whole.

Subjective application requirements

In fact, the Measure does not contemplate the distinction between holding companies, sub-holding companies and subsidiaries. This circumstance represented an important novelty, as prior to Measure No. 2020/360494, only the holding/sub-holding company was required to jointly submit the Masterfile and the National Documentation, while the subsidiary company had to prepare only the National Documentation.

As of today, companies resident or established in the territory of the State, qualifying as such under current income tax provisions, are required to prepare both the Masterfile and the National Documentation in order to benefit from the so-called penalty protection.




Drafting burden

Ahead of the November deadline, the submission of the Masterfile represents a “new” burden for many Italian subsidiaries that will have to work in time to find the necessary information.

This aspect, in fact, entails a necessary prior organization with parent company given the new attention points under the new 2020 measure.

It is clear that the timelines for the transposition of information vary depending on whether:

  • the multinational group has Italian parent company, in which case access to information will be significantly easier and more immediate;
  • the multinational group has a foreign parent company, on the contrary, the documentation required from the Italian subsidiary may be more difficult to obtain for what concerns a series of group dynamics that the individual entity may not know or not easily access.

It is also given, the possibility for the subsidiary to use the Masterfile in English, if prepared at the group level, whether it contains all the necessary information required by the measure or is lacking in some points. In the latter case, it is advisable to use a pragmatic approach so as to create a kind of reconciliation model that is able to order what is already present in the centrally prepared document (if there are differences in terms of format/order) or to concentrate the necessary additions in a separate special document as an Addendum to the group Masterfile, in order to act directly on the Masterfile, adapting it to the necessary and sufficient content provided by the Measure.

In the situation where the Masterfile is not prepared at the group level instead, the subsidiary will have to work on drafting the document on its own.

Different timing of drafting

It may also happen that the Masterfile is prepared by the foreign parent company, which, however, has drafting timelines that exceed the ordinary deadline for the declaration in Italy.

In such a case, and in general, it should be allowed, similarly to what was clarified by answer no. 426/2021 on the subject of tax consolidation, to follow up the declaration within the terms that communicates or not the possession of the “TP Doc,” with a “substitute declaration” within 90 days (ex article 2, paragraph 7, first sentence of Presidential Decree 322/1998) and with a reduced fixed penalty (equal to 250 euros).


Given the introduction of new points of attention in the document and the difficulty, in some cases, in the incorporation of the information provided to the satisfaction of the necessary and sufficient content provided, it is necessary for the taxpayer to move in time.



    Move your business forward.
    Choose LPD as your trusted Advisor.