The transfer prices charged between related parties are under scrutiny in many jurisdictions worldwide. While companies typically consider transfer prices as, primarily, a corporate income tax issue, such adjustments can also have a VAT impact. In case of VAT mischaracterization of the TP adjustment, penalties could apply and, in some jurisdictions (such as Italy) criminal proceedings could be initiated in certain circumstances. Consequently, company tax managers should consider whether a TP cost allocation or TP adjustment gives rise to a supply of goods or services for VAT purposes, or whether the previously charged consideration should be adjusted.
Source Baker & McKenzie
Latest Posts in "Italy"
- VAT Implications of Italian Fixed Establishments in Cross-Border Transactions
- Italian Supreme Court Extends Direct Tax Principles to VAT in Offshore Company Cases
- Response No. 216/2025 – VAT Treatment of Transactions Between Permanent Establishments of the Same Foreign Entity Belonging to a VAT Group in Another EU MS
- eInvoicing in Italy
- Briefing document: Italy Clarifies VAT Treatment for Transfer Pricing Adjustments: Direct Supply Links Required
