Italy: Guidelines for international tax rulings, APAs | KPMG | BE

Italy: New guidelines for international tax rulings and APAs

Italy: Guidelines for international tax rulings, APAs

The Italian tax authorities issued guidance revising the procedures concerning international tax rulings that may be issued with respect to companies that have “international business operations.” These procedures apply with respect to advance pricing agreements (APAs) for taxpayers with transfer pricing issues.


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The guidance—known in English as “Statement of Practice no. 42296” (21 March 2016)—sets forth revised rules for companies seeking a tax ruling. Among the criteria for companies eligible for a tax ruling are requirements that a resident company satisfies certain transfer pricing requirements or that a resident company has paid dividends, interest or royalties to a non-resident company or has itself been paid dividends, interest or royalties by a non-resident company. 


Taxpayers can enter into advance pricing agreements (APAs) with the Italian tax authorities by means of an international tax ruling. The new guidance clarifies the application process and describes steps during the consideration and approval process. Once approved, the APA international tax ruling applies for the year in which it is signed and for the following four tax years. They are only two circumstances when the ruling will apply retroactively.  Lastly, the guidance provides for rules for monitoring and measures for amending a tax ruling.


Read a March 2016 report [PDF 517 KB] prepared by the KPMG member firm in Italy: New international tax ruling implementing provisions

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