On 30 December 2021, the Italian Revenue Agency has published Ruling No. 884 clarifying the VAT treatment of transfer pricing (TP) adjustments.
In the case at issue in Ruling Answer No. 884/2021, a resident company made a number of TP adjustments with respect to supplies of goods to subsidiaries resident in different EU Member States, where they acted as distributors of the relevant products. The tax authorities clarified that these TP adjustments fall outside the scope of VAT, because they do not have a direct link with the supplies of goods carried on by the resident taxable person.
