International taxation and transfer pricing

By being aware that access to new markets and the consolidation of the activity in those markets in which the company is already present represent a growing critical success factor, Russo De Rosa Associati offers a wide range of activities aimed at supporting the entrepreneur in the process of navigating the dynamics of internationalisation.

In this context, assistance is focussed on methods for implementing projects for establishment overseas (by means of a preliminary evaluation of the formal legal presence framework of the host country - creation of offices of representation, permanent organisations and subsidiary companies) and investment plans in Italy by foreign subjects, intervening both at the start-up stage of the various initiatives (by means of drawing up opinions, memorandum and feasibility studies) and in the executive and final stages when the activity has become fully operational. In a case where the specific situation so requires, forms of communication are initiated with the Inland Revenue (by means of preventive measures of clarification aimed at minimising the possibility of contestation by the same as much as possible) and the Firm avails itself of the network of contacts created by it over the years as well as with foreign financial Administrations.

In particular, as regards consultancy for Italian and foreign multinational groups,  the Firm has developed specific experience in the analysis and implementation of transfer pricing management procedures which allow the risks associated with transfer pricing to be fully sustained: from the stage of economic analysis to the preparation of functional analyses until preparation of the related documents.

The Firm’s activity is specifically structured in respect of all the typical stages of a transfer pricing analysis:

  • mapping of corporate activities, carried out by means of a qualitative/quantitative description of the operations amongst the affiliate companies and disclosure of applied and/or applicable transfer prices in order to identify the main areas of risk from the tax/legal viewpoint;
  • functional analyses of the activities and transactions of the companies that are the subject matter of the analyses by means of acquiring in-depth knowledge and understanding of the latter; the purpose of this is to identify the factors for creating value (functions and risks). In this sense the characteristics and the classification of the corporate functions and risks between the various entities of the Group are the subject matter of analyses. This stage is normally carried out by means of interviews with corporate management and by using dedicated check-lists created and developed by the Firm’s professionals over the years;
  • choice of the method of valuation solely within the environment of those recommended by the OECD and accepted by Italian tax authorities;
  • economic analyses realised by means of comparative analysis (according to the chosen method) of the applied prices or the profit margins realised in transactions between the companies subject matter of such analysis and those concerning independent companies with comparable functions and risks. The analysis is frequently carried out by the Firm availing itself of specific databases for identifying “comparable” transactions/subjects.

Following the activities described above, documentation complying with the various national regulations is produced and collated in order to provide a solid justification for the adopted transfer prices as well as for supporting future planning.