Italy: Transfer pricing of financial transactions – proper classification and recharacterisation risk

Federico Vincenti, Carola Valente

Federico Vincenti and Carola Valente of Valente Associati GEB Partners/Crowe Valente examine how the Italian tax authorities scrutinise financial transactions and cash pooling arrangements, with potential recharacterisation risks under transfer pricing rules

In recent years, the Italian tax administration has shown increased attention to intragroup transactions involving financial instruments – such as cash pooling arrangements and financial loans – and their proper classification.