GE Medical Systems Italia S.p.A. is an Italian company engaged in the sale and installation of medical diagnostic equipment and the provision of technical assistance and maintenance services, primarily to hospitals and private clinics in Italy. The company, fiscally resident in France, is part of th ... Read more

KAI S.r.l. (formerly Shell Italia Aviazione s.r.l.) is an Italian company operating in the oil sector, specifically in the marketing of aviation fuel (jet fuel) for the Shell Italia group. It was wholly owned by Shell Italia Holding S.p.A. The dispute concerned the deductibility of intra-group costs ... Read more

An Italian property rental company transferred funds to its Luxembourg parent at a 2% interest rate, which the Italian tax authority challenged as below market, asserting 4.3% was arm's length. The Regional Tax Commission of Lazio annulled the assessments, finding the 2% rate justified by market indicators. Italy's Supreme Court upheld that decision in 2026, confirming the tax authority had not sufficiently proved the rate was non-arm's length ... Read more

The Italian tax authority assessed EPTA S.p.A. for FY 2015, arguing that a downward transfer pricing adjustment made by Hungarian authorities to its subsidiary warranted a corresponding upward adjustment in Italy. The Lombardy Court of Appeal sided with the taxpayer, finding insufficient proof of arm's length deviation. Italy's Supreme Court reversed that decision in 2026, remitting the case for fresh assessment and affirming that the arm's length principle targets artificial profit shifting ... Read more

An Italian luxury watch and jewellery distributor was assessed by the Revenue Agency, which rejected its TNMM net cost plus benchmarking and substituted its own EBIT margin comparables from the AIDA database. The company argued the agency's comparability analysis failed to account for contractual terms, market conditions, and business strategies per OECD guidelines. Italy's Supreme Court ruled in favour of the taxpayer in November 2025 ... Read more

An Italian luxury watch and jewellery retailer purchased goods from its Swiss parent and reported losses, pricing transactions using the CUP method. The Italian Revenue Agency applied the TNMM with return on sales as the profit level indicator, issuing assessments totalling EUR 4.69 million. The company argued TNMM ranked lower in the method hierarchy and that losses stemmed from high rental costs. Italy's Supreme Court decided in favour of the tax authority in November 2025 ... Read more

An Italian company receiving intra-group services was assessed for additional taxable income after tax authorities applied TNMM benchmarking and set arm's length profitability at the third quartile. The taxpayer challenged the comparability of selected European companies, citing differences in business models and asset structures, including fleet ownership. The Italian Tax Court ruled in favour of the taxpayer in September 2025, finding the benchmark study fundamentally flawed ... Read more

Domori S.P.A. sold goods to Agriland, and the Italian tax authorities issued transfer pricing assessments challenging the arm's length price. The Regional Tax Commission had annulled the assessments, finding the parties were not controlled under the applicable Italian provisions. Italy's Supreme Court dismissed the tax authorities' appeal in July 2025, confirming that the stricter control criteria under the legislation in force at the time of the transactions were not satisfied ... Read more

Italy's tax authority assessed Prysmian s.p.a. for 2012, raising adjustments under CFC rules for income attributed to its Singapore subsidiary and a domestic transfer pricing charge. The Regional Tax Commission upheld both, finding PCS acted as a passive conduit. Prysmian appealed to the Supreme Court in 2025, challenging the application of transfer pricing rules to domestic transactions and alleging failures to address double taxation and CFC cross-appeal grounds ... Read more

Italian tax authorities assessed Domori and Gruppo Illy, arguing that shared directors between Domori and Agriland established control under Article 110 TUIR, justifying arm's length pricing adjustments on goods sold during loss-making years. The Provincial and Regional courts cancelled the assessment. Italy's Supreme Court upheld those decisions in 2025, confirming that shared directorships alone do not establish the control required to trigger transfer pricing rules ... Read more

An Italian tax authority challenged an Austrian company as a shell under Article 73 TUIR and applied transfer pricing rules to its Italian affiliate under Article 110(7) TUIR. After taxpayers succeeded in both lower instances, Italy's Supreme Court found the appellate court's reasoning inadequate on both the 2014 foreign incorporation issue and the 2015 transfer pricing disputes, remanding all five joined cases for re-examination ... Read more

CNH Industrial and its Italian subsidiary FPT Industrial faced transfer pricing adjustments for 2013 and 2014 after tax authorities found intercompany transactions undocumented and not proven arm's length. Lower courts overturned the assessments citing materiality thresholds and market circumstances. Italy's Supreme Court reversed those decisions in 2025, finding the reasoning inadequate and affirming that simplified documentation relief cannot override the fundamental obligation to apply arm's length pricing ... Read more

An Italian company sold fruit extract powder to an Austrian subsidiary at prices nearly tripled upon rapid resale through related entities to Liechtenstein. Italy's Supreme Court ruled in 2025 that the arm's length principle had not been correctly applied, finding the initial sale price abnormally low. The Court remitted the case to the Bolzano Court of Tax Justice to verify whether the entire sales chain involved related parties and whether the price deviated from comparable independent transactions ... Read more

An Italian company paid interest to a Luxembourg finance vehicle and claimed withholding tax exemption under EU Directive 2003/49/EC. Italian tax authorities denied the exemption, arguing the Luxembourg entity was a conduit lacking beneficial ownership. The Supreme Court dismissed the authorities' appeal in February 2025, applying a three-step beneficial ownership analysis focusing on contractual obligations, functional substance, and OECD-benchmarked margins ... Read more

An Italian aircraft manufacturer wholly owned by a Swiss parent had applied the CUP method to price its controlled transactions. The Italian tax authorities rejected this approach and substituted the cost-plus method for financial years 2008 and 2009. The Supreme Court dismissed the authorities' appeal in February 2025, affirming that the CUP method was properly applied and that an implicit preference for CUP persists under the OECD Guidelines despite the removal of a formal hierarchy ... Read more

The Italian Revenue Agency challenged transfer pricing arrangements involving Kulch S.p.A. and Eco Leather S.p.A., arguing the Regional Tax Commission wrongly rejected the TNMM in favour of the CUP method. Italy's Supreme Court dismissed the Agency's appeal in January 2025, confirming that CUP was the most appropriate method, that no interest was owed by the American subsidiary, and that commissions paid to a Hong Kong entity were legitimately deductible ... Read more

An Italian subsidiary of a Spanish travel technology group paid volume-linked incentives to local travel agencies and deducted input VAT on those payments. The Italian tax authorities denied the deduction, arguing the payments lacked a synallagmatic link to any taxable service. The Tax Court of Appeal sided with the taxpayer in November 2024, finding the incentives were valid consideration for taxable supplies of services ... Read more

An Italian packaging machine manufacturer applied the CUP method to its intra-group transactions, but tax authorities substituted the TNMM following an audit of FY 2008. The Italian Supreme Court dismissed the company's appeal in October 2024, confirming that OECD Transfer Pricing Guidelines are non-binding guidance and that the TNMM was the most appropriate method given the company's limited-risk, pre-confirmed-order manufacturing profile ... Read more

A Dutch holding company received dividends from its Italian subsidiary and sought a withholding tax refund under the EU Parent-Subsidiary Directive. The Italian tax authorities rejected the claim, but Italy's Supreme Court ruled in favour of the taxpayer in 2024, finding that Vernay Europa B.V. satisfied the substantive business, control, and business purpose tests for beneficial ownership, referring the case back for a final factual determination ... Read more

Costa Crociere's agency agreement with its Brazilian subsidiary was recharacterised as a loan by Italian tax authorities, who applied LIBOR-based transfer pricing adjustments to impute interest income of approximately €40 million. The Italian Supreme Court found that lower courts had inadequately analysed the transaction's economic substance and the risks borne by each party, remanding the case to the Liguria Regional Tax Commission for detailed reassessment in 2024 ... Read more

An Italian call centre subsidiary received a 5% cost mark-up from its Dutch parent. Tax authorities removed loss-making companies from the benchmark study, raising the median to 7.42% and issuing an assessment. The Supreme Court overturned lower tribunal rulings in 2024, finding that loss-making comparables can only be excluded when their losses result from exceptional circumstances not comparable to the tested party ... Read more

ING Bank SPA charged 3.90% interest on a loan to a Dutch group company, but Italian tax authorities assessed the arm's length rate at 6.81%. After the Regional Tax Commission upheld the adjustment, Italy's Supreme Court remanded the case in 2024, finding the lower court had failed to adequately explain why the tax authority's rate arguments were decisive over competing evidence, including Bank of Italy rates and coeval intra-group financing rates ... Read more

UFI Filters SpA paid related Chinese companies for filter supplies using cost-plus mark-ups. Italian tax authorities challenged the arm's length nature of those mark-ups using a benchmark of six comparables. After mixed lower court rulings, Italy's Supreme Court dismissed the tax authority's appeal in April 2024, upholding the Regional Tax Commission's finding that the comparable companies were insufficiently comparable under the cost-plus method ... Read more

The Italian tax authorities assessed additional income on non-interest bearing loans granted by Sadepan Chimica S.R.L. to its foreign subsidiaries in Belgium and Luxembourg, applying notional rates of 3.83% and 5.32%. The taxpayer appealed, arguing authorities ignored specific financial conditions and misallocated the burden of proof. Italy's Supreme Court ruled in favour of the taxpayer in March 2024, finding the comparability analysis was insufficient ... Read more

Italian tax authorities disallowed Gru Comedil s.r.l.'s deduction of intra-group management service costs, arguing insufficient documentation of actual benefit received. The case reached Italy's Supreme Court, which overturned the assessment in 2024, confirming that intra-group service costs are deductible where the recipient derives actual, objectively determinable utility that is adequately documented, ruling in favour of the taxpayer ... Read more

An Italian parent sold goods to a domestic subsidiary in a tax-advantaged region at a 4% mark-up instead of the market-standard 10%. The tax authority adjusted the price upward under Article 9 TUIR. Italy's Supreme Court confirmed in March 2024 that arm's length principles apply to purely domestic transactions under Article 9 TUIR, even where Article 110 TUIR does not, upholding the assessment against Heidelberg Italia S.R.L ... Read more

Terex Italia, a heavy machinery manufacturer, issued a credit note to its UK related distributor adjusting sales prices, which Italian tax authorities challenged as resulting in below-cost sales. The Provincial and Regional Tax Commissions largely upheld the assessments. Italy's Supreme Court, in January 2024, decided mostly in favour of the taxpayer and remanded the case for reexamination, addressing comparability analysis and the most appropriate transfer pricing method ... Read more

Arvin Replacement Products SRL entered a zero-balance cash pooling agreement with its Irish parent at Euribor ± 0.5%. Italian tax authorities recharacterised the arrangement as a medium-to-long-term loan and assessed additional interest income. Italy's Supreme Court upheld the lower court's decision in favour of the taxpayer, finding the authorities had not discharged their burden of proof and that the agreed interest rate was not unusual ... Read more

Italian tax authorities challenged GKN Driveline Firenze's decision to acquire a property complex through an intra-group transfer lease rather than direct purchase, disallowing related deductions as an abusive tax arrangement. The Provincial and Regional Tax Courts had ruled in favour of the taxpayer. Italy's Supreme Court, in October 2023, found procedural and substantive errors and remanded the case for reexamination under the general anti-avoidance rule ... Read more

Tiger Flex, restructured as a contract manufacturer within the Gucci Group, claimed tax deductions on acquired goodwill amortisation, producing continuous losses. Italy's tax authority disallowed the deductions, finding the goodwill benefited the group as a whole. The Regional Tax Commission initially ruled for the taxpayer, but Italy's Supreme Court reversed that decision in 2023 and remanded the case to a differently composed Regional Tax Commission for re-examination ... Read more

The Italian tax authorities challenged Otis Servizi s.r.l. over intra-group cash pooling interest rates and royalty payments made to its US parent for trademarks, know-how, and patents covering FY 2007–2009. Authorities reclassified the cash pool as a financing contract and reduced the royalty rate from 3.5% to 2% of turnover. Italy's Supreme Court ruled in favour of the taxpayer in August 2023, rejecting both adjustments ... Read more

An Italian video-game distributor faced a tax assessment reducing the deductibility of costs paid to its sister company. Lower courts dismissed the taxpayer's appeal, dismissing a PwC benchmarking study as mere opinion. Italy's Supreme Court in 2023 set aside the regional court decision, holding that the court had failed to properly evaluate the arm's length study, and remanded the case for further examination ... Read more

An Italian company sought to deduct costs for intra-group services, but the tax authority disallowed the deductions on the grounds that the taxpayer failed to prove the effectiveness and relevance of the services received. The Regional Court partially annulled the assessment. Both parties appealed to the Supreme Court, but during proceedings they reached a settlement and the case was withdrawn in June 2023 ... Read more

SGL Carbon SPA paid interest on loans from its German parent company. Italian tax authorities challenged the rate as excessive, applying external comparable uncontrolled prices. The Supreme Court ruled in the taxpayer's favour in 2023, holding that Italian transfer pricing rules under Article 9 direct preference toward internal comparisons, and that the tax authority failed to justify its departure from the internal CUP method ... Read more

An Italian manufacturer of household goods was assessed by tax authorities for FY 2008 after selling products to a group company below normal value, with adjustments made using the TNMM method. Lower courts upheld the transfer pricing adjustment. The Supreme Court remanded the case for re-examination, finding the Court of Appeal had reasoned inadequately and contradicted itself by referencing both the CUP and TNMM methods without proper justification ... Read more

An Italian car sales company rented a showroom to a related entity with identical ownership for just €5,000 per year. The tax authority challenged the below-market rental fee under Italy's normal value rules. The Supreme Court dismissed the taxpayer's appeal in April 2023, confirming that deviations from normal value in domestic intra-group transactions can constitute evidence of non-inherent costs or concealed income ... Read more

Dolce & Gabbana S.R.L., a trademark licensee, sub-licensed rights to its subsidiary DG Industria and engaged US affiliate DG Usa for marketing services under a cost-plus arrangement. Italy's tax authority challenged the deductibility and arm's length nature of these intra-group charges. The Supreme Court ruled mostly in favour of the tax authority in November 2022, remanding the case for re-examination on key transfer pricing and benefit-test grounds ... Read more

An Italian sub-holding company received loans from a Luxembourg group entity as part of a financial restructuring within the Engie group. The Italian tax authority challenged the arrangement, arguing the Luxembourg company was a conduit lacking beneficial owner status. Italy's Supreme Court upheld lower tribunal decisions in favour of the tax authority, confirming that treaty benefits and EU Directive protections were rightly denied in 2023 ... Read more

An Italian lighting group, Arditi S.p.A., was assessed additional royalty income after tax authorities determined its Hong Kong and Chinese subsidiaries used the parent's trademark without paying arm's length royalties. The Italian Supreme Administrative Court dismissed Arditi's appeal in December 2022, upholding the Court of Appeal's decision and confirming the tax authority's 5% royalty assessment as well-founded ... Read more

An Italian snow groomer manufacturer faced a transfer pricing reassessment after tax authorities rejected the group's cost-plus method and applied a CUP approach, citing a 11% intra-group mark-up against 20–32% charged to independent distributors. After losing at first instance, Prinoth S.p.A. appealed. Italy's Supreme Administrative Court remanded the case for re-examination in December 2022, leaving the method selection question unresolved ... Read more

Quaker Italia Srl, a distributor of lubricating oils in Italy, challenged a 2012 tax assessment recalculating its distribution remuneration using a modified TNMM resale price approach rather than the taxpayer's cost-plus version, resulting in over €1.18 million in additional taxable income. After lower courts upheld the assessment, Italy's Supreme Administrative Court remanded the case in November 2022, finding the Regional Tax Commission had failed to provide adequate independent reasoning in its judgment ... Read more

Ferrari SpA applied the CUP method to price controlled transactions with foreign subsidiaries, including Ferrari North America. The Italian Revenue Agency challenged this, arguing TNMM was the most appropriate method. The Regional Tax Commission sided with Ferrari, and the case reached Italy's Supreme Court in 2022, which ruled mostly in favour of the tax authority, addressing method hierarchy, burden of proof, and proximity of evidence principles ... Read more

BASF Italia faced tax assessments for FY 2006 challenging the deductibility of goodwill amortisation arising from two mergers and interest on intra-group loans from low-tax jurisdictions. The Italian tax authorities also invoked anti-avoidance rules under Article 37-bis. Italy's Supreme Court remanded the case for re-examination in June 2022, leaving key issues on burden of proof and deductibility unresolved ... Read more

An Italian parent company licensed patents and know-how to a domestic sub-holding company and provided group management services at cost. The tax authority challenged the royalty rate and sought a 5% mark-up on services. The Provincial Tax Commission ruled in favour of the taxpayer in 2022, accepting arguments that transfer pricing rules do not apply to purely domestic transactions and that the cost reallocation required no mark-up ... Read more

Promgas s.p.a., a gas intermediary jointly owned by Eni and Gazprom Export, was assessed by Italian tax authorities for FY 2005/06 on the basis that its operating margins fell below arm's length under the Transaction Net Margin Method. The Regional Tax Commission upheld the assessment. Italy's Supreme Court remanded the case for re-examination in 2022, raising issues around comparability analysis, tested party selection, and the appropriate arm's length range ... Read more

An Italian textile company faced tax authority challenges on multiple controlled transactions, including cost deductions, bad debt, and intra-group pricing. The Supreme Court upheld one ground regarding deductions claimed under an unregistered private contract with a subsidiary, rejecting all other pleas including the taxpayer's argument that global tax consolidation excluded transfer pricing rules. The case was remanded to the Court of Appeal for reconsideration ... Read more

Following a tax audit, Italian authorities challenged Mauser S.p.A.'s financing arrangement with its non-resident parent, arguing that a payment on account of a future capital increase constituted debt rather than equity, affecting thin capitalisation calculations under Article 98 TUIR. The dispute covered tax periods 2004 to 2007 and involved interest deductibility and loan classification. Italy's Supreme Court remanded the case for re-examination in February 2022 ... Read more

Arnoldo Mondadori Editore SpA financed itself through a Luxembourg subsidiary that issued bonds to US investors and on-lent the proceeds to the Italian parent. The Italian tax authority denied withholding tax exemption, treating the subsidiary as a conduit and US investors as beneficial owners. Italy's Supreme Court disagreed, ruling in 2022 that the Luxembourg entity qualified as beneficial owner under the OECD Model Tax Convention commentary ... Read more

Skechers USA Italia SRL challenged a 2004 transfer pricing assessment in which Italian tax authorities attributed recurring losses to artificially inflated purchase prices paid to its Swiss parent. The taxpayer argued losses reflected start-up costs and a competitive market. After lower courts sided with the authorities, Italy's Supreme Court in 2022 ruled mostly in favour of the taxpayer and remanded the case for reexamination ... Read more

BenQ Italy SRL faced tax authority challenges over costs recharged by its Dutch parent, BenQ Europe BV, acting as a procurement intermediary sourcing goods from low-tax jurisdictions. Authorities denied deductions, alleging the interposition lacked economic substance and that guarantee fees for customer solvency insurance were unjustified. After lower courts upheld the assessment, Italy's Corte di Cassazione remanded the case for reexamination in 2022 ... Read more