ITALY Law and Practice Contributed by: Marco Valdonio and Gabriella Cappelleri, Maisto e Associati
(ii) bilateral or multilateral, when they involve the taxpayer, its foreign counterparty(ies), the IRA and one or more foreign tax authorities, covering all the DTT matters, including transfer pricing. Bilateral and Unilateral APA Procedure The unilateral APA procedure is regulated by Article 31-ter of the Presidential Decree No 600/1973 and by its implementing regulations issued by the IRA Director on 16 March 2016 (the “2016 Regulations” ). For the bilateral and multilateral APA procedure, the governing pro - vision is laid down by the relevant DTT and in particular by the rule corresponding to Article 25(3) of the OECD Model Convention, which pro - vides for mutual agreement procedures (MAPs) between the tax authorities of the contracting states aimed at avoiding double taxation. The APA procedure is concluded (i) in the case of unilateral APAs, with the execution of a bind - ing agreement by and between the IRA and the Italian taxpayer; or (ii) in the case of a bilateral or multilateral APAs, with the execution of a binding agreement by and between the IRA and one or more foreign tax authorities, as well as of a cor - responding binding agreement by and between the IRA and the Italian taxpayer mirroring the transfer pricing method and criteria agreed upon between the tax authorities. During the effectiveness of the APA, the Tax Auditors are prevented from auditing the trans - actions covered by the APA. The office in charge of the administration of the programme has the power to assess if the tax - payer complied with the terms and conditions set out by the APA and if no changes occurred in the factual and legal circumstances founding the APA. Both unilateral and bilateral/multilateral
APAs can be renewed upon request of the tax - payer. 7.2 Administration of Programmes The APA programme is administered by the IRA. Specifically, unilateral APAs are administered by the Revenue Agency – Large Taxpayer Central Directorate – Audit Sector – Advanced Agree - ment Office ( Agenzia delle Entrate, Direzione Centrale Grandi Contribuenti, Settore Controlli, Ufficio Accordi Preventivi ); while bilateral and multilateral APAs are administered by the Rev - enue Agency – Large Taxpayer Central Directo - rate – Audit Sector – Resolution and Prevention of International Tax Disputes Office ( Agenzia delle Entrate, Direzione Centrale Grandi Con- tribuenti, Settore Controlli, Ufficio Risoluzione e Prevenzione Controversie Internazionali ). 7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures Italian laws do not provide for automatic co- ordination between the APA process and MAPs. Nevertheless, consistency is normally secured because the same office is in charge of both MAPs and bilateral/multilateral APAs. 7.4 Limits on Taxpayers/Transactions Eligible for an APA There are no limits on which taxpayers and/or transactions are eligible for an APA. Indeed, an APA application can be submitted by all Italian taxpayers regardless of the size of the activity performed and of the kind of the intercompany transaction to be covered, provided that the pro - visions laid down by Article 110(7) of the ITC apply. The scope of bilateral and multilateral advance agreements may include not only transfer pricing
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