- The Italian Revenue Agency issued an answer clarifying transfer pricing adjustments for VAT in intercompany transactions
- The taxpayer, an Italian company, imports goods, processes them, and exports the final product to the U.S. through a third party for a related company
- The taxpayer requested clarification on the VAT relevance of transfer pricing adjustments for the taxable base of export transactions
- The Agency confirmed that transfer pricing adjustments affect VAT when contractual clauses clearly show the intent to alter the agreed consideration
- The parties set transaction considerations based on the arm’s length principle
- The total amount of the taxpayer’s second invoice balances the export transactions, making it relevant for VAT
- Both invoices fall under the non-taxable regime as per Article 8 of the VAT Decree
Source: news.bloombergtax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
