LDP TAX

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.

LDP provides a Tax & Accounting extensive and comprehensive advising and also support for the preparation of corporate tax returns in Italy, for multinational companies. LDP covers from the everyday transactions up to strategic business advice such as Merge & Acquisition, Corporate Finance and Transfer Pricing. We can also arrange your financial statements, company secretary services managing everything you need under one roof.

As you know tax compliance is strictly policed to ensure that Countries are collecting the revenues they need.  So, it is not enough to meet all the necessary deadlines but also to respect the Transfer Pricing law, double treaties applications and OECD rules, LDP  our expert will drive you with their long expertise.

Through our international network of overseas tax and accounting professionals, we connect you with a team of  Tax experts all over the World

Frequently Asked Questions

share capital

Private Limited Company  -S.r.l. isn’t required a minimum of capital, but it’s recommended to start with capital that guaranty a regular cash flow  while for a Public Limited Company – S.p.A. is required a minimum of €50.000;

Quotas vs shares

S.r.l. capital is divided into quota while S.p.a. capital is divided into several types of of shares; foreign shareholder has allowed to invest in Italian company. Both S.r.l, and S.p.a. could have a sole shareholder and a Sole Director instead of a board of Director. Directors could be foreign.

Benchmark Analysis

In order to verify the respect of the “arm’s length principle” within the intercompany transactions carried out by an MNE, the OECD Guidelines provide the possibility of using a transactional method, based on an analytical approach.

The benchmark analysis is aimed at search for companies engaged in transactions compared to those carried out by the “tested party” (i.e., the MNE or its subsidiaries), in order to identify an arm’s length range of profit margins for the activities under analysis.

In order to obtain the penalty protectiontaxpayers have to declare the possession of the documentation in the annual tax return (“check the box”). 

Depending on the group structure, either both a Master File and a Local File or just the Local File need to be prepared.

A table will be set up and will summarize all the documentation required for each level of the ownership structure.

The TPD must be prepared in Italian.

Yes, the taxpayer is allowed to present an integrative declaration within the deadline for filing the next year tax return (e.g. FY 2023 tax return is amendable in favour of the taxpayer until FY 2024.

Yes, the taxpayer is allowed to present an integrative declaration within the deadline for filing the next year tax return (e.g. FY 2019 tax return is amendable in favour of the taxpayer until FY 2020).

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

Alessandra Zago

Alessandra Zago

Senior Tax Manager

Alessandra provides tax advice to national and multinational corporations. She also assists clients both in M&A and Corporate Finance. 

LDP provides Tax, Law and payroll  scalable and customised services and solutions. LDP Professional have also matured a significant expertise in  M&A, Corporate Finance, Transfer Price, Global Mobility Consultancy and Process Automation. 

Sign up to our newsletter

Subscribe to our Newsletter

Subscribe Form