With provision no. 360494 of 23 November 2020 (Provision), the Italian Revenue Agency revises the structure and content of the transfer pricing documentation requirements for taxpayers who intend to benefit from the penalty protection regime (i.e., non-application of penalties for unfaithful tax return pursuant to article 1, paragraph 6, and article 2, paragraph 4-ter, of legislative decree 18 December 1997).
The new provisions replace the provisions of the director of the Italian Revenue Agency (2010/137654) of 29 September 2010 and are a clear sign of the alignment with the OECD standard.
The new rules will be effective from the current year (i.e., fiscal year 2020) and apply to: (i) companies resident in Italy that are part of a multinational group and that have conducted inter-company transactions with non-resident related parties; (ii) permanent establishments in Italy of non-resident companies; and (iii) resident companies in Italy with permanent establishments abroad that have opted for the so-called branch exemption regime (for transactions between the head office and the permanent establishment and between the latter and other group entities).
