ITALY Law and Practice Contributed by: Marco Valdonio and Gabriella Cappelleri, Maisto e Associati
• the MNE group has more than one subsidiary in the EU and designates another subsidiary to file the CbCR, provided that such subsidi - ary receives all the information needed to prepare the filing; • the MNE group voluntarily appoints a sur - rogate parent company to file the CbCR in its state of residence, provided that if the surro - gate parent company is resident in a non-EU state, additional requirements must be met (eg, it must be resident in a state with manda - tory CbCR rules and with a qualifying AEoI agreement with Italy); or • the Parent voluntarily files CbCR with the tax authorities of its state of residence, subject to certain additional conditions (eg, the foreign state should enact CbCR legislation by the deadline for filing the first CbCR under the CbCR Decree). 9. Alignment With OECD Transfer Pricing Guidelines 9.1 Alignment and Differences As discussed in 1. Rules Governing Transfer Pricing , Italian transfer pricing regulations are substantially aligned with BEPS Action 13 and the OECD Guidelines. Therefore, there are no notable differences to be highlighted. 9.2 Arm’s Length Principle Italian transfer pricing rules consistently apply the arm’s length principle under all circumstanc - es. 9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project As discussed in 1. Rules Governing Transfer Pricing , Italian transfer pricing regulations have been amended in order to better align the rules with the best international practices (ie, OECD
Guidelines as amended following the BEPS pro - ject). 9.4 Impact of BEPS 2.0 Italy has been contributing to the collective effort to redefine international tax rules for the digital economy since its inception in the OECD. Indeed, it participated in the discussions that led the OECD and the G20 to adopt the first report on the taxation of the digital economy, consist - ing of Action 1 (Addressing the tax challenges of the digital economy) of the action plan, devel - oped by the OECD to counter the phenomena of BEPS. In 2021, Italy chaired for the first time the G20, a privileged discussion forum for the world’s major economies, which has supported the work car - ried out so far at the OECD. Under, the Italian Presidency of the G20, on 8 October 2021 a historic agreement was reached between 136 countries of the OECD/G20 Inclusive Framework on a two-pillar solution of reforming the interna - tional tax rules, to be implemented in 2023. In support of this agreement, Italy (and other countries, such as Austria, France, Spain and the United Kingdom) and the United States signed on 21 October 2021 a transitional agreement to move from the current system of taxation of digital services to a new multilateral solution: the United States has to stop the trade measures against Italy and the other signing countries and the latter will have to allow a certain method to credit the digital services tax paid against the Pillar One liability in order to avoid double taxa - tion, once the Pillar One rules are implemented. Furthermore, Italian legislation on a digital ser - vices tax already sets out the repealing of the digital services tax once the political agreement on digital economy taxation is implemented.
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