Transfer Pricing

Our transfer pricing practice area include economists, certified financial analysts, tax practitioners, lawyers  who offer state of the art top quality allowing us to assist taxpayers with home country and foreign documentation requirements by preparing transfer pricing documentation reports that analyze the arm’s length nature of their intercompany prices and engineer tax efficient, commercially viable transfer pricing strategies.

Governments and their revenue authorities are responding to the globalization of business operations by strengthening legislation, demanding stricter documentation of transfer pricing practices and imposing higher penalties for non-compliance. Multinationals must be able to present clear arguments to support transfer pricing decisions. Our Transfer Pricing team helps companies develop and implement economically supportable transfer prices, document policies and outcomes and respond to tax authority challenges.

 

Our Transfer Pricing Services professionals provide advice in the following areas:

  • Development and implementation of commercially clear, fiscally efficient transfer pricing policies and modifying of existing policies to reflect changes in law or business circumstances.
  •  Identification of benchmarks
  •  Review of the business supply chain
  • Preparation of masterfile, a set that contains information common to all group companies in the EU
  • Preparation of the documentation for a strong, first-line defense against tax authority challenges.
  • Assistance in collection of evidence of the receipt of assistance
    received from related parties
  • Assessment and management of the transfer pricing risk factors and
    pursuing of bilateral or multilateral Advance Pricing Agreements (APAs)
    or Competent Authority negotiations.
  • Study of the tax impact of transfer pricing policy
  • Performing benchmark studies supporting or defending the implemented transfer pricing policies..
  • Assistance in litigation process in disputes with regards to transfer pricing issues.

We can also assist multinationals with multiple foreign affiliates to prepare global documentation satisfying all of their documentation requirements in an efficient and consistent basis.

We works with clients to explore strategic opportunities to enhance global tax and treasury planning, by aligning the relationship between the taxpayer’s value drivers and income/cost streams to improve their effective tax rate (ETF). This can include supply chain and intellectual property strategies and global charges. Deloitte’s services help integrate operational and tax planning in a way that allows clients to treat tax as another cost of doing business making strategic decisions on an after tax basis.

In light of today’s dynamic global economic environment and the potential for legislative changes, assessing a multinational’s global business model may no longer be an optional exercise. Our team provides high quality, customized tax and business model transformation services. With its focus on helping multinationals integrate their operational and tax planning in a scalable and sustainable way, 

For the first time in Italy companies must prepare the necessary documentation supporting the transfer pricing policy adopted. The ruling identifies two types of documentation:
• the masterfile
• domestic documentation

This documentation, supplied during a scheduled check or during a financial investigation, allows the taxpayer the non application of penalties as specified in Article. 1, paragraph 2 ter of Legislative Decree 18 December 1997, n. 471. It is in line with the Code of Conduct in the European Community documentation on transfer pricing (the so-called “EU Transfer Pricing Documentation) which must be applied to transactions between group entities resident in the EU, as well as the transactions of subsidiaries of EU companies and group entities located in countries outside the EU.

The documents required are the master file and the country file. The master file shows the true economic state of the company and provides a picture of the multinational and its system for setting transfer prices which is accessible to all member states concerned. More than one master file is permitted if the group is involved in different sectors of activity (or business lines) which are covered by specific transfer pricing policies.
Under the ruling, the documentation must be:
• prepared annually, the only exception being for small and medium enterprises, which don’t need to update the data for the analysis of comparability for the two years following the year of preparation of documentation
• written in Italian, but which allows the master file to be set up in English
• initialed on each page by the legal representative or his delegate, and signed on the last page, even electronically
• delivered to the Revenue Agent within ten days of the request
• provided in electronic format, if only hard copies are available, the taxpayer has the option, within a reasonable time to prepare documentation in electronic form, subject to the non-application of sanctions.
The information contained in the documentation must be true. Sanctions may be imposed if documents are incomplete, do not conform to the minimum content laid down, or do not correspond to reality.
To reassure the taxpayer it is expected that the information contained in the documentation cannot be used for “purposes other than those directly necessitated in the course of an institutional check