Tax authorities all over Europe are engaged in a process of changing important issues of the tax legislation and even the procedures, basically to close the tax loopholes, and … to bring more money to the budget. There is no surprise, many of these changes impact transfer pricing side of the multinationals companies. So, if your mother-company is based in Italy or France, have in mind that the fiscal context is even more complicated.

Italy – the Finance Act 2014 says clear that yes, transfer pricing adjustments are subject to regional corporation tax (IRAP), with retroactive effect for every financial year beginning on January 1, 2008 or later. But it should be noticed that Italian taxpayers may now claim IRAP tax relief under a Mutual Agreement Procedures (MAP).

France – the 2014 Finance Law cancels the suspension of tax payments which was available when a MAP was launched. Another measure says the large companies have to provide their management accounts during a tax audit (it means, for example, that the tax authority could check the accuracy of the cost base, the allocation keys uses and the net margins of each intra-group transaction).