Italian taxation

Extract

[...] When making reference to enterprises under common control, the term "participation in the management, control or capital" includes the participation by more than 50% in the capital, voting rights or profits of another enterprise or the dominant influence on the management of another enterprise based on ownership or contractual bounds. Economic double taxation caused by transfer pricing adjustments can be mitigated under Italy's income tax treaties that follow the OECD Model or that contain other similar, appropriately worded provisions. Within the European Union, cases of economic double taxation caused by a transfer pricing adjustment can also be dealt with under the Arbitration Convention (Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, 90/436/EEC). [...]

[...] The same rule shall apply if the result thereof is a decrease in the taxable income of the resident enterprise only inasmuch as it is necessary for the observance of agreements reached with the competent authorities of foreign States pursuant to the special mutual agreement procedures provided for in income tax treaty. Once established that a transaction falls within the scope of the Italian transfer pricing rules it must be verified if such transaction has been carried out on the basis of the arm's length principle as introduced above. Amongst different methodologies, the administrative practice put emphasis on the application of traditional transaction methods which are identified by the followings: A. "the price comparison method"; B. "the resale price method"; and C. [...]

[...] for registration - Maybe an addition 0.2% of Tobin tax for Spa and Sapa On the purpose of an asset selling: - Income tax on the selling about calculation should be made by comparison between the sale price of the asset and the cost incurred by the seller to purchase such asset. - Potential payment to the fiscal authority by 5 yearly equal installments - No VAT applicable since we're in presence of a VAT registered entity - Rate of for registration in case of real estate + on eventual goodwill - Up to 100? for cadastral and mortgage On the purpose of a Merger and acquisition process: - No taxation on merger and acquisition - No VAT applicable since we're in presence of a VAT registered entity - 200? [...]

[...] of registration - 400? for cadastral and mortgage - Potential increase of the assets value up to the market value : this will be tax in a range of [12-16] % To be known: Transactions between companies belonging to the same group may fall outside the entrepreneurial logic underlying the same transactions incurred between two independent parties (mainly profit driven). In order to avoid the armful practice of "shifting profits" from one jurisdiction to another just for benefiting of a lower tax rate, the Italian tax system provide for specific rules to be applied on transactions with associated companies. [...]

[...] "the cost plus method". The main factors to be considered for determining the comparability of transactions are the following: - characteristics of goods/services; - functions performed by the parties (so called "functional analysis"); - risks assumed by the parties; - characteristics of the relevant market. As a general rule the functions carried out by the respective parties will determine, to some extent, the allocation of risks between the parties and therefore the conditions (i.e., the remuneration) each party would reasonably expect in an independent transaction. [...]