Transfer pricing in Italy

Transfer pricing in Italy at a glance

Regulation Type OECD
Are there specific transfer pricing regulations? Yes
Submission deadline N/A
Submission deadline upon request 10 days
Annual update required Yes
Official language requirements Italian
Potential impact of penalties N/A


Italian tax law

Rules for transfer pricing in Italy are based upon:

  • Presidential Decree no. 917 of 22 December 1986 (Decree 917), article 110 (7);
  • Presidential Decree no. 917 of 22 December 1986 (Decree 917), article 9 (3)-(4);
  • Legislative Decree no. 78 of 31 May 2010 (Decree 78), article 26
  • Circular Letter nos. 32/9/2267 (September 22, 1980), 42/12/1587 (December 12, 1981) and 271/E/1059 (October 21, 1997).
  • Circular Letter nos. 141/E/86270 (June 4, 1998), 98/E/107570 (May 17, 2000) and 148/E/139500 (July 26, 2000) for IRAP purposes only;
  • Decision of the Commissioner of Italy Revenue Agency dated September 29, 2010;
  • Circular Letter no. 58/E (December 15, 2010), and
  • Circular no. 21/E (June 5, 2012).


The Italian transfer pricing rules are largely in line with the OECD transfer pricing guidelines.


Accepted methods are:

  • the comparable uncontrolled price (CUP) method
  • the resale price method
  • the cost plus method
  • the profit comparison method
  • the profit split method
  • the invested capital profitability method
  • the economic sector gross margin method

Transaction-based methods are preferred over profit-based methods. The CUP method is preferred over the resale price and the cost plus methods.

Documentation requirements

Italy does not have statutory documentation requirements. However, having documentation is advisable as this can avoid shifting the burden of proof.


The Italian tax authorities require that all documentation should be submitted in Italian, or translated into Italian before submission of the documentation. They may accept documentation in other languages yet there is no guarantee that they will. The tax authorities are not obligated to accept documentation in foreign languages. Documentation prepared for penalty protection purposes must be in Italian.

Preparation deadline

Documentation for penalty protection purposes must be prepared by the tax return filing date relevant to the fiscal year being covered.

Deadline to submit upon request

The submission of the proper documentation to the tax authorities must be executed within 10 days of a request. In case, during an
audit or any other assessment activity, supplementary information is needed, it must be provided either within seven days of a request (or in a longer time period depending on the complexity of the transactions under analysis), to the extent that the period is consistent with the time of the audit.

Advance Pricing Agreements


Taxpayers with international business activities may apply for an “International Tax Ruling,” with contents and effect similar to a unilateral Advance Pricing Agreement (APA), regarding transfer prices, interest, dividends, and royalties.


When an APA has been signed, the APA remains in force for 3 three years. This is only different in the case that new facts have been emerged that would change the conditions of the transactions covered by the agreement.


There are no specific transfer pricing penalties, meaning that ordinary tax penalties apply.