Sanctions related to transfer pricing do not fall within the facilitating definition of pending disputes if an amicable procedure is initiated between states. The Revenue Agency clarifies this in Response No. 437 today, 26 September 2023. Access is permitted with payment
Revenue Agency clarifications continue regarding Facilitating the settlement of pending disputes.
The response to Question No. 437 today, September 26, 2023, addresses the related penalty Transfer pricing.
The Finance Department emphasizes that it is necessary to check whether the amount of tax-related penalties has been determined or not Another type of definition or otherwise paid.
In this specific case, a soft definition is not a viable option The tax has not been paidas the tax was subject to mutual agreement procedures that began between countries.
The tool that is within range Financial trucecan be used in case of waiver of ongoing friendly proceedings and any of them Pay the tax.
Pending disputes, green light to facilitate settlement of penalties with payment of tax
The September 30 deadline is approaching, and has been postponed to October 2, a key date for the proceedings Financial truce
The amounts due must be paid within the specified period and requested to benefit from the procedures stipulated in the 2023 Budget Law.
there Expiration Relating to, among other measures, the abolition of the quarter, private penance, and the facilitated settlement of outstanding disputes.
Clarifications have been received from the Revenue Agency regarding this latest instrument.
In the Response to Question No. 437 On September 26, 2023, the issue of transfer pricing sanctions will be examined. In the case in question, the penalty relates to an unpaid tax, to which you are subject Friendly procedure initiated between countriesThis is in line with the reference agreement.
- Revenue Agency – Response to Question No. 437 dated September 26, 2023
- Definition of pending disputes.
The Finance Department does not agree with the solution proposed by the applicant and explains why access to the soft definition is denied, on the grounds Reference regulatory framework
Possibility of identification easily Pending tax disputes It was expected before Paragraphs 186 to 205 of Article 1 of Law No. 100. 197 of 2022Or the 2023 Budget Law.
A convenient definition is provided for the conflicts in which it existsRevenue Agency Or theCustoms and Monopolies Agencypending in each case and adjudication level, effective January 1, 2023.
This definition is allowed if the tax is paid in the amount equivalent to dispute value, Established pursuant to Paragraph 2 of Article 12 of Legislative Decree of December 31, 1992 No. 546.
Specifically, the payment must be made in the following proportions:
- 90 percent If there is a pending appeal at the first stage;
- 40 percent In the event of a loss in a first instance judgment;
- 15 percent In the event of defeat, a second-degree referee shall be awarded.
the Paragraph 191 Specifies the following:
“Disputes related exclusively to non-tax-related penalties may be settled by paying 15 percent of the value of the dispute in the event of defeat by the competent tax office in the last or only non-prudential judicial ruling, on the basis of the merits or permissibility of the ruling instrument submitted on the effective date of this law, with the payment of 40 percent in other cases.”
The amount to be paid must be proportional dispute value, Or the tax amount Net interest and any penalties.
In the case of disputes that relate exclusively to sanctions, the possibility Pay part of the dispute valueWith payment of a percentage of the fine depending on the level of the sentence.
Pending Disputes: The transfer pricing penalty is excluded from the soft definition
After summarizing Reference regulatory frameworkthe Revenue Agency explains that in the case in question, the penalty related to transfer pricing was not included in Definition of facilitator.
It is in fact an unpaid tax, because it is subject to Friendly procedure initiated between countries On the basis of Articles 6 and 7 of the Convention of 23 July 1990, 90/436/EEC.
As specified in paragraph 5.1.6. From Circular No. 6/2019, only outstanding disputes related to penalties fall within the simplified definition if the amount is specified, even in another form. Definition type, or in any case paid.
In these cases, identification is provided without paying any tax but exclusively with Submit an identification request.
These clarifications, although they refer to the procedure set forth inArticle 6 of Legislative Decree No. 119 of 2018also applies to the new procedure inScope of the financial truce
In terms of transfer pricing, Penalties The imposed is Related to tax. Therefore, the Financial Department excludes the option of a soft definition.
In conclusion, the Revenue Authority confirms the following:
“Given that the payment of other taxes mentioned in the notification cannot lead to the cancellation of penalties related to the findings related to transfer pricing, the solution proposed by the applicant cannot be shared, without prejudice to the possibility of waiving the amicable procedures in progress and proceeding with the payment of the tax.”
Access to the financial truce procedure will only be permitted through Pay the tax.
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