Country-by-Country-Reporting in Italy: an example of information to be communicated to the parent company
Article 3 minute read

Country-by-Country-Reporting in Italy: an example of information to be communicated to the parent company

07 December 2017

Companies and permanent establishments belonging to foreign multinational groups resident in Italy, must provide quantitative data and other information necessary for parent companies to complete the Country-by-Country Report. Our local expert explains.

The Ministerial Decree of 23 February 2017 (The Ministerial Decree) published last March, sets out the operating methods for the submission of the Country-by-Country Report (CbCr) to the Revenue Agency. These instructions are based on the requirements of the OECD’s Report Action 13: Guidance on the Implementation of Transfer Pricing Documentation and Country-by-Country Reporting (BEPS Action 13).

This report recommended a standardized approach on three levels to each country for the preparation of the documents related to Transfer Pricing and CbCr (”three-tiered standardized approach”):

  • a Master File containing standardized information relevant for all multinational group members;
  • a Local File referring specifically to material transactions of the local taxpayer;
  • a CbCr containing certain information relating to the global allocation of the MNE’s income and taxes paid together with certain indicators of the location of economic activity within the multinational group. 

How it works in Italy

In Italy, the preparation of the Master File and of the Local File are still ruled by the Provision of the Director of the Revenue Agency of 29 September 2010 (The Provision). The content of this Provision differs, in part, from the guidelines provided in BEPS Action 13 and contained in the Annexes I and II - Chapter V. The Ministerial Decree has identified the content of the CbCr and in principle has adapted to the content of Annex III - Chapter V of BEPS Action 13.

Therefore, parent companies residing in Italy -  heads of multinational groups required to prepare consolidated financial statements and that, in 2015, achieved consolidated revenues of at least 750 million Euro - must submit a CbCr for the FY2016 by the end of 2017.

The Provision defining the technical instructions for the submission of the CbCr was issued last 28 November; however, companies residing in Italy must have already completed a first mandatory fulfilment in the Tax Return (Form SC 2017, whose presentation expired on 31 October 2017), by "notifying" to the Revenue Agency, what subject of the multinational group was required to submit the CbCr.

Additionally, as several European and non-European countries have already adapted their local regulations regarding the documentation required by BEPS Action 13, companies and permanent establishments that belong to foreign multinational groups but reside in Italy, must provide data and information to the "group head", to allow the completion of the CbCr.


The following chart is an example of the sheet drawn up for a group of companies residing in Italy and owned by a foreign company belonging to a multinational group subject to the CbCr.

cbcr Italy 

The statement refers to the list of aggregated data of all companies resident in Italy, belonging to the group. This is the quantitative data required by the Ministerial Decree and includes details such as revenues, profit (losses) before income tax, income taxes paid and accrued, capital declared, retained earnings, number of employees and property, plant and equipment values (other than cash and cash equivalents).

The sheet is also compliant with the information required by BEPS Action 13 in Annex III - Chapter V named “model template for the Country-by-Country Report” - Table 1. Overview of allocation of income, taxes and business activities by tax jurisdiction.

Get expert help

TMF Group can support MNEs by assessing their local CbCr requirements and notifying the relevant local authorities. Our experts on the ground can also – in those jurisdictions that require companies to do so - assist you with the preparation of the Master and Local file. To learn more about the abovementioned requirements or how TMF Group can help your company, please make an enquiry.

Learn how to successfully navigate foreign rules and regulations.

Written by

Lorenzo Ravizza

Chartered Accountant and Auditor

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