LDP provides a Tax extensive and comprehensive advising in Italy for multinational companies covering the everyday transactions up to strategic business such as M&A.

The founder(s) is/are requested to execute an incorporation deed which includes  memorandum and articles of association (drafted by LDP), before an Italian Public Notary. The good news is that the incorporation process can be carried out by distance through a power of attorney granted to one of our professional. the POA should be notarized and apostilled if the country where it is executed is member of apostille convention https://en.wikipedia.org/wiki/Apostille_Convention if it is not the case it should be notarized and legalized with a local Italian Embassy or Consulate where the power of attorney is executed.

 Directors,

a Sole Director or a Board of Directors could be appointed,  generally there are no restrictions regarding their number, nationality or place of residence.

The Directors’ remuneration is fixed by Stockholders’ meeting and the Board of Directors has the power to decide on special remuneration for Directors based on their responsibilities.

Article 110 of the Presidential Decree no. 917 of 22 December 1986:

”Components of the income statement of an enterprise derived from operations with non-resident entities that directly or indirectly control the enterprise are controlled by the enterprise or are controlled by the same corporation that itself controls the enterprise, should be valued with reference to that conditions that would be agreed between independent parties operating in conditions of free competition and comparable circumstances (…) ”

Article 26 of Law Decree no. 78 of 31 May 2010:

• Provides a penalty protection regime for companies that comply with the documentation requirements including the detailed format as set out in a Regulation dated 29 September 2010 and which notify possession of documentation when they file their tax returns.
• In cases of a TP adjustment, no administrative penalty should apply if the taxpayer has prepared documentation to support its intercompany transactions drawn up in accordance with the 29 September 2010 Regulation and had notified possession on its tax return.

Article 1, § 6 of Law Decree no. 471 of 18 December 1997:

• Documentation is not mandatory but if taxpayers prepare Italian compliant TP documentation they can claim penalty protection in the event of a TP adjustment. Otherwise ordinary penalties range between 90% and 180% of the tax assessed which could be reduced in case of an early agreement with the tax authorities.
• In order to benefit of the penalty protection in case of tax assessment, the possession of the documentation is made in the tax return (the deadline for filing a tax return is the end of the 9th month after the FY end (i.e. end of September 2019 as regards TP doc. for FY ended 31 December 2018).

• Chapter 1 :General description of the enterprise (history, recent evolution and general overview of the relevant markets of reference)
• Chapter 2 :Business Sectors General description of the specific market sub-industry and the main features characterizing the activities provided (i.e., degree of rivalry, industry concentration, category segmentation, geographical distribution, etc)
• Chapter 3 :Enterprise’s organization chart[“the paragraph contains a general overview of the role that each of the enterprise’s business units carries out within the general activity”]
• Chapter 4 :General business strategies pursued by the enterprise and potential changes compared to the previous tax year’s [the paragraph contains information regarding also specific strategies on specific sectors or markets]
• Chapter 5 :Controlled transactions (sale of tangible or intangible goods, provision of services, financial services transactions)
• Chapter 6 :Intra-group transactions (Cost Contribution Arrangement

• Upon the tax auditors request, the documentation must be produced within 10 days. Taxpayers have a further 7 days to produce additional supplementary information if requested (potentially extendible in case of agreement with the tax inspectors)

• If the requested information is not provided, the taxpayer will not benefit from the penalty protection regime.

  The implication is that the level of penalty would be set higher in the range (90% to 180% with reductions for early settlement) than would otherwise apply