By Francesca Amaddeo, Lecturer-Researcher, Tax Law Competence Centre (SUPSI), Manno, Switzerland
At the end of 2020, as usual, Italy adopted its new budget law.
Budget Law 2021 addresses a variety of issues. It mainly aims to boost the recovery, encompassing support measures for businesses (and workers).
Among others, it is worth noting paragraphs related to “tax compliance and taxpayers’ dues”. Therein is provided new provisions on advance pricing agreement rollback.
Multinational group taxpayers that had already agreed to advance pricing agreements to address their transfer pricing can now rely on their retroactivity for tax periods still open for assessment.
The rollback applies to unilateral, bilateral, and multilateral APAs. In the first case, standstill circumstances, both in fact and in law, are required. Moreover, the competent authority must not have started an assessment.
For the other two categories, bilateral, and multilateral, it is also necessary that the foreign tax authority involved agrees with the rollback.
Thus, rollback is not granted when issues encompassed by the agreement are under investigations or tax assessment, past circumstances are changed, or foreign tax authorities do not agree to extend retroactivity of bilateral or multilateral agreement.
Finally, the request is subject to the payment of a fee calculated taking into account the overall turnover realized by the group the taxpayer involved belongs to.
In addition, the new law provides that to obtain and advance pricing agreement, the taxpayer must now pay the following fees:
- USD 12,185 (EUR 10,000) for turnover up to USD 121,859 (EUR 100,000);
- USD 36,557 (EUR 30,000) if the turnover is higher than USD 121,859 (EUR 100,000) and lower than USD 913,942 (EUR 750,000);
- USD 60,929 (EUR 50,000) if the turnover is more than USD 913,942 (EUR 750,000)
Francesca Amaddeo
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€10,000 if the total group turnover is less than €100 million;
€30,000 if the total group turnover is between €100 million and €750 million; and
€50,000 if the total group turnover exceeds €750 million.