Italy vs. UFI Filters (April 2024): A Transfer Pricing Dispute Over Arm's Length Markups

Name: ArmsLength AI
Address: New York, United States
Telephone: +1-800-555-1212
Price range: $$$

Borys Ulanenko

CEO of ArmsLength AI

TL;DR - Key Takeaways

The Italian Supreme Court ruled in favor of UFI Filters, rejecting tax authorities' transfer pricing adjustment due to poor comparability analysis.
Proper selection of comparable companies is critical - tax authorities failed to establish comparability on product, geography, and functional profile.
Even without formal transfer pricing documentation, taxpayers can prevail if tax authorities don't meet their burden of proof with reliable benchmarking.
The case reinforces the importance of following OECD Transfer Pricing Guidelines in Italian tax disputes.

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