- The Italian Revenue Agency issued guidance on VAT treatment for transfer pricing adjustments.
- The guidance was provided in Letter No. 214/2025 on August 20.
- The taxpayer involved is an Italy-based distributor within a multinational group.
- The taxpayer made periodic transfer pricing adjustments to maintain arm’s-length margins.
- The adjustments were documented with a breakdown of affected invoices.
- The taxpayer sought clarification on whether these adjustments should be included in the VAT taxable base.
- The Tax Agency clarified that adjustments are subject to VAT if they directly modify the consideration for specific supplies and are contractually linked to the original transactions.
Source: news.bloombergtax.com
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.
