On May 14, 2018, the Ministry of the Economy and Finance signed the decree implementing Article 110, paragraph 7 of Presidential Decree 917/1986, regarding transfer pricing. The decree updates guidelines on transfer pricing regulations by adapting the previous instructions to the OECD practice and, in particular, to the so called “arm’s length principle”
Among the new features arising from the final version of the decree it must be underlined the recognition of compliance with the arm’s length principle of any value that falls within the range resulting from the chosen financial indicator and the provision of a simplified procedure, on an optional basis, for low-value adding intra-group services.
Finally, the decree provide that, with a future document to be issued by the Director of the Revenue Agency, the provisions concerning transfer pricing documentation will be updated and the documentation eligibility requirements will be established