Italian Court Rules Group Guarantee Avoids Transfer Pricing

An unremunerated intra‑group guarantee from a subsidiary to its parent isn’t subject to transfer pricing rules if it’s backed by valid economic reasons and serves the group’s overall business interests, Italy’s Supreme Court has ruled.

The Corte Suprema di Cassazione’s May 7 ruling was posted to the court’s website over the weekend. It upheld the findings of the Regional Tax Court of Piedmont, dismissing the final appeal by the Italian Revenue Agency.

The case concerns NN EUROPE SpA (now TN ITALY SpA, a subsidiary of Japanese group Tsubaki Nakashima Co.), which in 2009 provided guarantees of about €42 million ($49 ...