Italy issues changes to the operation of country-by-country reporting
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Italy issues changes to the operation of country-by-country reporting

Italy issues changes to the operation of country-by-country reporting

Antonella Della Rovere and Sara Parillo of Valente Associati GEB Partners/Crowe Valente outline how the latest Ministerial Decree improves and streamlines the current country-by-country reporting process for Italian entities.

The Ministry of Economy and Finance has produced some amendments regarding the use of the data and information contained in country-by-country reporting (CbCR) with the Ministerial Decree no. 194 of August 8 2019 (hereinafter, the Decree).



Pursuant to Article 4 of the Decree of February 23 2017, the information contained in CbCR concerns consolidated data relating to all the companies of the group analysed regarding revenues, profits, taxes, etc., as well as the definition of all the activities and functions carried out by the group’s entities. 



As such, Article 7 of the Decree provides the possibility for tax authorities to transfer, if requested, data relating to CbCR to the Department of Finance of the Ministry of Economy and Finance, which shall use them exclusively for economic and statistical analysis, as well as for other related institutional purposes. Thus, the Department of Finance will also have access to all the information and data contained in the above-mentioned documentation.

Notwithstanding the above, it is important to point out that it is forbidden for any transfer pricing adjustment to be based on information contained in the CbCR or to be exchanged between the competent authorities in each member state of the European Union and any other jurisdiction with which an agreement is concluded. The use of the latter information, in accordance with the aforementioned Decree and with the provisions of the OECD should be limited to the activities listed below:

  • Monitoring and risk assessment related to existing transfer pricing agreements;

  • Risk forecasting (in addition to those referred to in the previous point, which may be related to tax base erosion); and

  • Preparation of economic and statistical analysis which reveal anomalies present in different jurisdictions for companies operating in the same field and belonging to the same multinational group.


Although the data and information contained in CbCR may not be used as sufficient evidence to carry out transfer pricing surveys by the tax authorities, it can be utilised as an important starting point to determine potential areas of risk for further verification and control.




This information can therefore influence tax audits, determine their approach and risk, which could lead to premature conclusions in the absence of the carrying out of a more detailed investigation, aimed at clarifying the critical aspects and at evaluating the existence of possible tax risks.



Moreover, it is important to underline that the data contained in the CbCR is consolidated and may not be significant for the purposes of tax audits concerning a specific company of the multinational group. This data provide indicators that are not very representative of the real tax structure of the individual entity, because they have clear limits due, in part, to the lack of homogeneity of the sources from which the information used derives.



Furthermore, should the CbCR include a higher level of content, by providing further detailed information related to each single entity belonging to the multinational group, it could be used as another tool in an audit by tax authorities to conduct further analysis on the single entities’ tax structure.





Antonella Della Rovere

T: +39 02 7626131 

E: a.dellarovere@gebnetwork.it



Sara Parillo

T: +39 02 7626131

E: s.parillo@gebnetwork.it

more across site & bottom lb ros

More from across our site

PwC could elect a woman into the senior leadership position for the first time; in other news, KPMG Australia has extended its CEO’s term
The Senate report into PwC’s scandal is titled ‘The cover up worsens the crime’
Law firms that are conscious of their role in society are more likely to win work, according to a survey of over 23,000 in-house professionals
The firm’s tax business generated a quarter of HLB’s overall revenues in 2023
While successful pillar two implementation will require collaboration across all units, a combination of internal and external tax advice is at the centre of the effort
Binance has also been accused of manipulating foreign exchange rates via currency speculation and rate-fixing
Six individuals should have raised questions over information they received but did not breach professional standards, according to the firm
The partnership of KPMG UK has installed Holt for a second term as CEO and senior partner; in other news, a Baker McKenzie partner has sued the IRS
HSBC has settled a claim originally worth £240m relating to a failed film tax relief scheme without admitting liability or wrongdoing
Their prediction comes after the IRS announced it would send compliance letters to large foreign companies emphasising their US tax obligations
Gift this article