Italian Audits and TP: Jump Out of the Frying Pan into the Fire?

Multinational enterprises might be forgiven for thinking that a transfer pricing examination is sufficiently challenging on its own. Between the need for detailed factual and economic support and the inherent subjectivity of some TP issues, dealing with tax authorities auditing TP can present more than enough to keep one busy. In Italy, the situation can be even more complex, with TP exams routinely bringing additional complications – and significant risks – in their wake. What might otherwise have been a routine TP audit may result in authorities claiming the existence of a hidden permanent establishment of a foreign entity, or ...