- Transfer Pricing Adjustments Relevance: The Italian Revenue Agency stated that transfer pricing adjustments are relevant for VAT if contractual terms clearly indicate an intention to alter the agreed consideration for intercompany transactions, whether increasing or decreasing the amounts.
- Arm’s Length Principle: The involved parties must adhere to the arm’s length principle, ensuring that the pricing for their transactions reflects the rates that would be charged between independent entities in comparable situations.
- VAT Treatment of Invoices: The Agency confirmed that the total amount in the taxpayer’s second invoice, which represents the final balance of the export transactions, is subject to VAT considerations, and both invoices are classified under the non-taxable regime according to Article 8 of the VAT Decree.
Source: globalvatcompliance.com
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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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