Italy’s High Court Reaffirms Benefit Rules on Intragroup Fees

Italian fastening products manufacturer Friulsider SpA lost a Supreme Court appeal over the tax deductibility of management fees paid to its then-French parent under an intragroup service agreement.

The fees, although documented, were correctly disallowed because Friulsider failed to show any demonstrable economic or commercial benefit, according to a Corte Suprema di Cassazione ruling released June 17 and published on the court’s website over the weekend.

“This approach is in line with the OECD Guidelines, according to which, in the matter of intragroup services provision, it is necessary to proceed with the so‑called benefit test, that is, to ...