DESCRIPTION OF FACTS
- In 2008 and 2009 the Italian parent company of an international group («ItaCo») provided intra-group services to its foreign subsidiaries («Foreign SubCos»).
- Italian tax authorities issued two tax assessment notices arguing that ItaCo omitted to tax profits deriving from intra-group services provided to its Foreign SubCos.
JUDGEMENT OF THE COURT
- As regards the intra-group services, taxpayers bear the burden of proof with reference to the existence of the costs and the benefit deriving from such services, which must be supported by adequate documentation.
- Transactional Profit Split method is as reliable as the other transfer pricing methods to the extent that (i) it is possible to identify a strong link between the costs incurred and the value added in the intercompany transaction and (ii) the selected allocation keys lead to reliable results.
- Transfer pricing is relevant for IRAP purposes also in relation to FYs from 2008 to 2013.
Leave A Comment