ITALY Law and Practice Contributed by: Marco Valdonio and Gabriella Cappelleri, Maisto e Associati
taxpayer is allowed to make an upward adjust - ment as per the above, also amending the trans - fer pricing documentation. 5.2 Secondary Transfer Pricing Adjustments Italian laws do not provide any provision on sec - ondary transfer pricing adjustments. However, it should be noted that rare cases have emerged in which a secondary adjustment has to be applied following a primary adjustment made during a tax assessment. In this sense, the IRA approach may reflect the guidance provided by the OECD Guidelines, which do not preclude the possibility of making such adjustments. The Italian exchange of information framework is characterised by a wide and complex land - scape of instruments available to the Tax Audi - tors, through which they can share information with, or gather information from, other jurisdic - tions. In summary, for transfer pricing matters, the exchange of information can be based on DTTs, tax information exchange agreements (TIEA), and EU directives executed/implemented by Italy. DTTs Italy has a wide treaty network, largely based on the OECD Model Tax Convention on Income and on Capital of 1969, generally compliant with Article 26 of the OECD Model Convention. As a general rule, under DTTs, contracting states are obliged to exchange not only necessary informa - tion, but also pieces of information that can be “foreseeably relevant” , with the only limitations 6. Cross-Border Information Sharing 6.1 Sharing Taxpayer Information
being those applicable to generalised requests for information, of a banking or financial nature, and not concerning specific taxpayers (so-called fishing expeditions). The exchange of informa - tion can occur upon request, automatically or spontaneously. TIEAs Furthermore, Italy has concluded several TIEAs with states other than those with whom it has a DTT in force. Based on such agree - ments, exchange of information can occur only upon request; the pieces of information to be exchanged are those foreseeably relevant for the assessment and collection of taxes. EU Directives Italy has implemented, inter alia, the following EU directives. • Council Directive (EU) 2015/2376 (DAC3), which provides for the automatic exchange of tax rulings and advance pricing agreements (APAs); however, bilateral or multilateral APAs concluded with third countries are excluded if the agreement reached does not allow its dis - closure. These agreements may be subject to spontaneous exchange, if allowed and where the competent authority of the third country authorises the disclosure. • Council Directive (EU) 2016/881 (DAC4), which provides for the automatic exchange of reporting documents of multinational compa - nies (ie, country-by country reporting). • Council Directive (EU) 2018/822 (DAC6), which provides for the automatic exchange of information regarding cross-border aggres - sive tax planning mandatorily communicated by Italian intermediaries (such as, lawyers, tax accountants, notaries, financial institutions and the like) or taxpayers.
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