Italy: Country-by-Country Reporting Guidance

Tuesday, November 28, 2017

Italy: Guidance issued for country-by-country reports

On 28th November 2017, the Italian revenue agency issued Measure 276956 (in Italian) which provides guidelines for the preparation and implementation of country-by-country (CBC) reporting.

ACTION: If you have an obligation to provide a country-by-country report to the tax authorities in Italy, review this guidance to ensure not only that your upcoming filing is in compliance, but that you have considered the pros and cons of any options – such as the source of data options that can be applied.

The information to be included in the CBC report is similar to that outlined by the OECD’s “Guidance on the Implementation of Country-by-Country Reporting” published in September 2017:

  • Table 1: Aggregate information for the jurisdiction in which the multinational group entities are tax resident (or in the case of permanent establishments, the jurisdictions in which they are located).
  • Table 2:  List of the group’s companies and permanent establishments for each jurisdiction in which the group operates, together with details on the core business activities of each of them.
  • Table 3: Name of the group, the relevant tax period, the source of the data and any further details likely to assist the understanding of the compulsory information provided in the CbC report.

The report must be prepared in both Italian and English and must be filed within 12 months of the group’s financial year end – although, for the first year, the report must be filed by 31 December 2017 if a group’s tax year started on or after 1 January 2016 and ended before 31 December 2016.

The source of data to be used when preparing the CBC report must be consistent from year-to-year and taxpayers have the following options:

  • Consolidated financial statements
  • Individual financial statements
  • Internal accounting records
  • Accounting records held for regulatory purposes

Other Transfer Pricing Compliance Considerations

For a summary of the status of OECD’s Action 13 transfer pricing documentation requirements in Italy, read this or contact us.

by aspect advisory in: Europe