Autocentro Pavese S.R.L., a company engaged in the purchase and sale of cars, had rented a showroom to another company with the same shareholding structure and director for a fee of only 5,000 euro per year.
Following a tax audit an assessment of additional taxes was issued. The audit had resulted in several findings, one of which concerned the failure to issue invoices in accordance with market prices for renting of showrooms.
The Court of Appeal upheld the assessment and an appeal was then lodged by Autocentro Pavese S.R.L. with the Supreme Court.
Judgment of the Supreme Court
The Supreme Court upheld the judgment and dismissed the appeal of Autocentro Pavese S.R.L.
“On the subject of the determination of business income, the deviation from the “normal value” of the transaction price pursuant to Article 9 of Presidential Decree No. 917 of 1986 may in fact be relevant, even for internal intra-group transactions, as a circumstantial element for the purpose of assessing the uneconomicity of the transactions from the standpoint of the lack of inherent nature of the excessive costs, or the possible (partial) concealment of the price in the case of excessively low profits. (Cass. Sec. 5 – , Judgment No. 16948 of 25/06/2019, Rv. 654388 – 02).”
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