Italy: Guidance concerning transfer pricing documentation, penalty protection regime
Detailed guidance regarding the Master file, the Local (or country) file, low-value adding services
Penalty protection regime
The Italian tax authorities issued guidance—Circular letter No. 15/E 2021 (26 November 2021)—to clarify the transfer pricing documentation requirements and implementation of the “penalty protection regime.”
In the circular letter, the tax authorities confirmed among other items:
- The structure and the contents of the transfer pricing documentation to be eligible for penalty protection must be in line with those outlined by the provision No. 360494 (23 November 2020).
- The transfer pricing documentation must always include a Master file and a Local (“country”) file.
- The transfer pricing documentation and related annexes must be electronically signed by the legal representative of the Italian taxpayer using a legally binding digital signature and a time-stamp must be affixed before the filing of the income tax return. If the Master file has already been signed by the legal representative of the direct or indirect parent company, it must also be digitally signed by the legal representative of the Italian taxpayer; the time-stamp must be affixed as well.
The circular provides further detailed guidance regarding the Master file, the Local (or country) file, low-value adding services, and rules regarding application of small and medium enterprises.
Read a February 2022 report [PDF 175 KB] prepared by the KPMG member firm in Italy
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.