The corporate tax rate is
Banks and other financial institutions are taxed at 27.5%. Non-operating companies are taxed at 34.5%. There is an additional regional tax on productive activities (IRAP). The ordinary rate is 3.9% for manufacturing/trading companies, 4.65% for banks and other financial institutions and 5.9% for insurance companies.
Rules on transfer pricing are set out in Article 9 and Article 110 of the Italian Income Tax Code. Article 9, paragraph 3, states that ‘normal value’ means the average price or consideration paid for goods and services of the same or similar type, carried on at market conditions and at the same level of business, at the time and place in which the goods were purchased or the services were performed. For the determination of the normal value, reference should be made to the extent possible to the price list of the provider of goods or services. In the absence of the provider’s price list, reference should be made to the price lists issued by the Chamber of Commerce and to professional tariffs, taking into account usual discounts. Article 110, paragraph 7, states that components of the income statement of an enterprise derived from operations with non-resident corporations that directly or indirectly control the enterprise, are controlled by the enterprise or are controlled by the same corporation that itself controls the enterprise should be valued on the basis of the normal value of the goods transferred, services rendered and services and goods received, if an increase in taxable income would arise thereby. Possible reductions in taxable income as a result of the normal value rule are allowed only on the basis of mutual agreement procedures or the European Union (EU) Arbitration Convention.