Complex transfer pricing examinations in Italy can lead to complications and risks for multinational enterprises.
Complex transfer pricing examinations in Italy can lead to complications and risks for multinational enterprises. These audits may result in claims of a hidden permanent establishment or the creation of new transactions involving embedded royalties for intellectual property, along with associated local withholding tax liabilities.
To manage these challenges, companies need to identify the tax authorities' intentions early and develop effective audit management strategies. Understanding options for dispute prevention and resolution is also important. Despite the challenges, the Italian competent authority has successfully resolved advance pricing agreements (APAs) in recent years, providing a pathway for companies to navigate these complex audits.
Read a December 2024 article* prepared by KPMG tax professionals: Italian Audits and TP: Jump Out of the Frying Pan into the Fire?
* Reproduced with permission from Tax Management International Journal, 12/4/2024. Copyright @ 2024 by Bloomberg Industry Group, Inc. (800-372-1033) http://www.bloombergindustry.com