Italian Court Rules Against Shell’s Intra‑Group Cost Deductions

An Italian subsidiary of Shell must see a real benefit from cost‑contribution agreements with its foreign affiliate to claim deductions on shared intra-group costs, a top court ruled.

The benefit also must be objectively determinable and adequately documented, the Corte Suprema di Cassazione added in its ruling released March 13 and published on the court’s website over the weekend.

The ruling returns the case to the Corte di Giustizia Tributaria di secondo grado della Lombardia, a tax court for Lombardy, for a new assessment.

The dispute is ...