TAX DISPUTE RESOLUTION

On the 1st of July 2019, the EU’s Directive on tax dispute resolution (2017/1852) was approved and implemented as a directive that sets up a new process for resolving tax disputes in the European Union. Both Member States and taxpayers have new obligations and opportunities under this legislation.

Transfer Pricing remains one of the hottest areas in terms of assessment. It is evident from the growing number of disputes and the attention paid to it by the financial administration.

The peculiarity of this matter depends on the fact that the determination of the correct transfer price passes through an evaluation process that must take into consideration the characteristics of the transactions carried out and the reference markets, the strategies of the company and the group, the assets involved, the functions performed and the risks assumed.

 It will be in the taxpayer’s interest to detail these aspects as clearly as possible to provide the administration with the information framework necessary to find the adequacy of the transfer prices adopted.

Agreeing in advance with the Public Administration, through the use of the international ruling procedures, it is possible, also on a bilateral basis, obtain the advantage of avoiding audits and penalties. Furthermore, as clarified by the tax office old communication dated 25 / E / 2014, towards those accessing the procedure, it will be possible to initiate checks only regarding issues other than those covered by the ruling, to prevent the same business model being the subject of a different interpretation.

 Thus, a verdict concerning transfer prices should inhibit further controls, such as those relating to stable hidden organization or other aspects relating to the same business model.

LDP Transfer Price Services

• Economic analysis on databases (AMADEUS and AIDA) used and recognized by Italian Tax Administrations and international best practice
• Preparation of the entire documentation on transfer price: Country file and master file
• International tax planning and consultancy on value chain restructuring activities
• Assistance in tax litigation regarding Transfer Pricing and Permanent Establishment