This content is from: Italy

Italy and CbCR: recent developments and filing regulations for Swiss and US groups

Country-by-country reporting (CbCR) was introduced in Italy by Law No. 208 dated December 2015, published in the Official Journal No. 302 on December 30 2015), and entered into force on January 1 2016. A ministerial decree dated February 23 2017 (Decree), published in the Official Journal on March 8 2017, provided practical guidance on CbCR.

In principle, CbCR must be prepared by parent companies of multinational groups with a consolidated turnover exceeding €750 million ($895 million). However, in some cases (e.g. where the group foreign parent company is not obliged to, or fails to file the CbCR in its jurisdiction), the burden of filing the CbCR falls on an Italian subsidiary of the group.

Recently released Central Revenue Decision No. 275956, dated November 28 2017, provided further clarification related to cases in which Italian companies belonging to multinational groups may be relieved of CbCR obligations, including the CbCR voluntary filing by the group parent company.

In this situation, solely for the financial year (FY) in process on December 31 2016, the Italian controlled company may be relieved from the CbCR communication formalities if:

  • The parent company voluntarily files the CbCR in its jurisdiction within 12 months following the end of the reported FY;
  • The parent company jurisdiction has introduced, within the terms of the presentation of the CbCR, an obligation to file the CbCR, even if related to other FYs (e.g. the following FY);
  • A qualifying agreement between Italy and the parent company jurisdiction is in force at the deadline for filing the CbCR;
  • The parent company jurisdiction does not notify the Italian tax authorities of any systemic non-fulfilment situation; or
  • The Italian company of the group communicates to the Italian tax authorities which group entity bears the CbCR reporting obligation and its country of residence.

In addition to the above, Italian controlled entities of foreign groups may be exempt from the CbCR filing formalities if another foreign EU legal entity of the group is designated or another legal entity of the group, acting as a substitute for the parent company, is appointed.

Furthermore, Central Revenue Decision No. 288555, dated December 11 2017, provided for a postponement of the CbCR filing deadline, stating that the CbCR related to FY 2016 could be filed by Italian companies no later than February 9 2018 (instead of December 31 2017).

This additional guidance has been warmly welcomed as it allows better focus on the newly introduced fulfilment requirements, deeply rooted in BEPS Action 13. This is particularly significant in cases where the jurisdiction of the group parent company is introducing the CbCR regulations at a different time to Italy.

For example, Switzerland signed the OECD agreement for the automatic exchange of CbCR reporting on January 27 2016 (multilateral competent authority agreement, or MCAA), and this was endorsed by Federal Decree on June 16 2017. On the same day, a dedicated law (Law on the MCAA; LMCAA) was released by the Swiss Parliament to regulate CbCR preparation, filing and exchange regulations, in force since December 1 2017. Based on the LMCAA, the first FY subject to reporting is that beginning January 1 2018. However, Swiss parent companies may voluntarily file the CbCR related to prior fiscal years which will be transmitted by Swiss tax authorities to foreign competent authorities. The LMCAA was meant to formally activate the exchange of CbCR; as a matter of fact and as reported on the OECD website (please see:, the bilateral CbCR exchange relationship between Italy and Switzerland was to be activated as at December 1 2017 (the date on which the LMCAA entered into force).

Based on the above, the Italian tax administration should receive directly from the Swiss tax authorities the CbCR for the FY 2016 of Swiss headed groups. Therefore, when carrying out voluntary filing to the Swiss tax authorities for FY 2016, Italian-resident companies could name the Swiss ultimate parent company as the party responsible for CbCR.

Similar conclusions apply with reference to US cases, as a dedicated bilateral competent authority agreement (DTC CAA) was signed on September 27 2017 between representatives of Italy and the US providing for the CbCR automatic exchange. As provided by US regulations, the first FY covered by the CbCR is that beginning on June 30 2016. However, a voluntary filing by US resident parent companies is also acceptable for the period between January 1 2016 and June 29 2016.

Gian Luca

Barbara Scampuddu ( and Gian Luca Nieddu (
Hager & Partners
Tel: +39 02 7780711

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