TMC Italy SpA is a parent company which provides services and support to the commercial production activities of its affiliated companies based in foreign countries (Spain, Czech Republic, Germany, France, Israel, Brazil, United Kingdom). The costs of providing these intra-group services had been allocated between the related parties based on the number and salary of employees in FY 2008 and 2009. The tax administration issued an assessment where the allocation was instead be based on turnover – due to data supporting better correlation. The Court of first instance held in favour of the tax authorities. This decision was appealed by TMC to the Supreme Court. Judgement of the Court The Court dismissed the appeal of TMC in its entirety and decided in favour of the tax authorities. Excerpts: “CTR considered legitimate and correct the use of the method of allocation of the profits of the transactions adopted by the Office, as provided for by the OECD Guidelines 2010, since the allocation key chosen (turnover), although not being able to prevail in abstract terms over the other indicated by the taxpayer company (number of administrative employees), was more appropriate to the concrete case (see judgment p. 8, where it is stated that the method of allocation of the profits of the transactions used by the Office was more appropriate to the specific case). Judgment p. 8, where the inadequacy of the key indicated by the taxpayer is reported) and therefore compliant in terms of reliability of the results (OECD Guidelines, 2010, § 2.116).” “With regard to the application of the transfer pricing rules for IRAP purposes, the Appeals Committee, after having reconstructed the succession of relevant laws (from the repeal of Law No. 244 of 2007, to the rules set forth in Article. 1, Paragraph 281 and Paragraph 282 of the 2014 Finance Act), correctly affirmed that Paragraph 281, Article 1, Law 147/2013 (2014 Stability Law), extended the application of transfer pricing also to tax periods subsequent to the one in progress as at 31 December 2007, without any break in continuity with respect to the previous rules.” “The Court observes that art. 1, paragraph 281, I. n. 147 of 2013, is a rule of authentic interpretation, so that, as such, is intended to produce effects also for the past, allowing the application of the discipline of art. 110, paragraph 7, T.U.I.R. for tax periods from 2008 onwards.” Click here for English translation Click here for other translation ...

In February 2019, Colegio de Abogados de La Libertad (CALL) in Peru filed an appeal before the Constitutional Court claiming that tax debts of at least 9 billion soles (USD 2,5 billions) owed by 158 large companies could not be collected by the tax authorities (SUNAT) due to the statute of limitation in Legislative Decree 1421. By four votes against and one vote for, the Constitutional Court rejected the claim. Language/Year202220172010200919951979 English French German Spanish Chinese Turkish Czech Italien Hungarian Ukranian Slovenian Serbian Click here for English Translation ...

Whether the rule applicable to the specific situation had to be in force at the time the taxable event – in this case to the sales of the land, which were made during 2008 , 2009, 2010 and 2011, The time when the former Article 17 No. 8 of the Income Tax Law was in force – or at the later time when the tax assessment was being carried out, according to Article 64 of the Tax Code, when the rule modified by Law 20 was in force. Only once the tax authorities exercised the power to assess under Article 64 of the Tax Code, and determined that the sale was made at a value significantly higher than the commercial value of properties with similar characteristics and locations in the respective locality, was the right of the authority to collect the taxes established by the same provision born”. (Supreme Court, paragraph 7). “That, consequently, the rate of 35% should be applied to the amounts determined by virtue of the provisions of Article 64 of the Tax Code -as occurred in this case-, in accordance with Law No. 20,630, which, given its time of entry into force, governed the facts of the settlements known in these proceedings.(Supreme Court, paragraph 8). “That from the above reasoning, it can be concluded that the appealed judgment has not incurred in the errors of law attributed to it by the arbitration, which, therefore, must be dismissed. (Supreme Court, ninth recital). Click here for English translation ...

In 2014, the tax authorities issued the Italien Bank a notice of assessment with which it reclaimed for taxation IRAP for 2009 part of the interest expense paid by the bank to a company incorporated under Irish law, belonging to the same group which, according to the tax authorities, it also controlled. In particular, the tax authorities noted that the spread on the bond was two points higher than the normal market spread. The Bank appealed the assessment, arguing that there was no subjective requirement, because at the time of the issue of the debenture loan it had not yet become part of the group of which the company that had subscribed to the loan belonged. It also pleaded that the assessment was unlawful because it applied a provision, Article 11(7) TUIR, provided for IRES purposes, the extension of which to IRAP purposes was provided for by Article 1(281) of Law 147/13, a provision, however, of an innovative nature, the retroactivity of which was considered to be in conflict with the Community principles of legitimate expectations and with Articles 23, 41, 42 and 53 of the Italian Constitution. Decision of the Court The Court dismissed the appeal and decided in favor of the tax authorities. Click her for English translation Click here for other translation ...