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Tax Pills

  • Starts the public consultation on transfer pricing documentation

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    Italy’s Revenue Agency will hold a public consultation on the draft Circular letter on transfer pricing documentation. Particularly, the Agency provides a set of new clarifications in relation to the documents, mainly Master File and National Documentation that interested parties must prepared each year, suitable for enabling verification of compliance with the arm length principle of transfer prices charged by multinational companies.

    Timing and technical procedures of the opened consultation - Interested parties have time starting from yesterday, 20 September, to 12 October to send their comments and proposals to the following e-mail address To facilitate the process of cataloging and examining contributions received, interested parties are invited to follow the following scheme: Topic - Paragraph of the Circular letter - Observation - Contribution - Purpose. Once the public consultation phase is over, the Revenue Agency will publish the comments received, with the exclusion of those containing an express request for non-disclosure.

    The issues addressed in the Circular letter - The draft Circular letter provides a vast range of clarifications on the TP discipline. In particular, having reminded the reference regulatory context, it investigates, as already said, the purposes and structure of the documentation suitable to allow the verification of compliance with the arm length principle of the transfer conditions and prices applied, having regard to the contents of the documents called Masterfile and National Documentation. It illustrates the aspects concerning the documentation relating to permanent establishments and the documentation suitable for small and medium-sized enterprises. Furthermore, it clarifies the profiles connected to the forms, extent and conditions of effectiveness of the suitable documentation, as well as the aspects concerning the communication of the possession of the suitable documentation and the documentation to be prepared if taxpayers choose the simplified approach to enhance an intragroup transaction consisting in the provision of low added value services. In conclusion, it addresses the issue related to the assessment of suitable documentation by competent supervisory bodies.

    The two main documents – Shortly, the Master File contains information on the multinational group activities and global allocation of income among different entities, while the National Documentation  supplements the Master File, with a focus on the domestic entity on a national level. Both document contains specific information on the peculiarities of the local entity, as well as the transfer pricing analyses related to the transactions occurring between the latter and related parties located in different jurisdictions.

    Stefano Latini

  • The new Italian project for prepopulated Vat returns move on its first step


    The digitization of the Revenue Agency fiscal channels and tools takes another significant step forward. In fact, this week marks another digital-goal being the pre-filled draft VAT registers already accessible online for 2 million taxpayers who therefore can start to consult them within the Invoices and Payments portal. At the same time all taxpayers involved can also validate or modify the data of the operations carried out from 1 July 2021. Indeed, thanks to this further simplification, the operators can view and validate data, with or without changes, and also benefit of the exemption from record keeping. In addition, those who validate the draft VAT registers for all quarters of next year will also find the annual VAT return already precompiled in their reserved area starting in 2023. Furthermore, those who use the pre-filled VAT registers, validating them directly or integrating them earlier, will also enable to access, from 6 November, the communications of periodic settlements (Lipe models) prepared in pre-filled draft by the Agency for the reference quarter.

    2 million taxpayers are involved in the first phase of the project's launch - The group of operators involved in this first phase includes about 2 million taxpayers. The experimentation, in fact, which concerns the tax years 2021 and 2022, for now applies only to businesses, professionals and self-employed workers resident and established in Italy who carry out the quarterly payment, with the exclusion of some categories of subjects, such as those who work in particular sectors of activity or those that benefit of special regimes for VAT purposes, such as, for example, publishing, sale of used goods and travel agencies.

    A further step towards a smarter fiscal scenario - The Italian government has launched this ambitious new VAT collection program, under which the Revenue Agency will pre-fill VAT returns on behalf of taxpayers, with the aim to simplify the reporting and procedures of VAT documents and, at the same time, improve tax compliance. This is because pre-filled VAT forms can both simplify VAT collection for tax authorities and sharpen the ability of businesses to comply with tax duties.

    Stefano Latini