Transfer Pricing


transfer pricing With the expression transfer pricing we mean a complex phenomenon, it is difficult to provide an institutional definition of, since it was not directly born in a juridical-fiscal sphere, but derives from the analysis of the economic relationship between enterprises resident in different States who are members of the same group.

In particular, it is about verifying if the intercompany commercial transactions are carried out in accordance with the arm’s length principle, so that there is correspondence between the price set in the commercial operations between associated companies and the one that would be established between independent enterprises, in similar conditions, on the free market.

As the justification the discipline examined is based on, is that to avoid that through the modification of the value of the intercompany transactions, a transfer of taxable matter from high tax-system States toward territories characterized by less fiscal pressure, in order to safeguard their own taxing authority the single States have adopted a specific set of rules about the transfer pricing, which accepts the normal value assessment principle of the intercompany transactions contained in the Ocse convention model.

As far as Italy is concerned, the discipline of the transfer pricing is contained in the arranged disposal of the articles 110, seventh clause, and 9, third clause, of Tuir, which envisage that the price the commercial transactions occur at between enterprises resident in different States, bound by supervision and/or connection relationships must be assessed at normal value.

transfer pricing

By virtue of such disposals it is possible to find the subjective and objective requirements in presence of which it is possible to proceed to a correction of the intercompany transfer prices, in order to re-determine the taxable income of the enterprise fiscally resident in Italy after reconstructing the “normal value” of the intercompany transactions.

As far as the subjective requirement is concerned, it needs to be exchanges-of goods or services-between enterprises fiscally resident in Italy and companies fiscally resident abroad, bound by direct or indirect supervision relationships.


For companies belonging to a group we mean all the controlled companies, controlling companies, or companies directly or indirectly controlled by the same subject. The supervision can be of law or de facto.







The objective requirement which can make us talk about transfer pricing, is the discrepancy between the sale value of a good to a company of the group and the sale value of the same good on the free market.

With the term “Normal value”, in accordance with the art.9, cl.3 of the Tuir, we refer, in a first approximation, to the price or compensation practiced on average for goods or services that can be compared in condition of free competition, so close to those adopted in conditions of free market between independent enterprises.

Of course identifying the normal value is far more difficult if the intercompany transfers are about services, interests, royalties and other non-material goods and services.

The normal value can be determined in several ways, among which the main ones are those of price comparison, re-sale price and increased cost, besides other alternative methods.


To demonstrate the correct effectiveness on the subject of transfer pricing the companies must show the specific documents in case of verification, which is made of the Master File that has to collect all the information about the group of companies and the specification of the trans-national operations that occur between the companies of the group, and the Country File that refers to the single company concerned.

The arrangement of the documents related to the transfer pricings is to be indicated in the Modello Unico.