Every Italian-US group has transfer-pricing obligations — even single-product, single-subsidiary structures. Italian sanctions reach 200% of the disputed tax.
Arm's-length policy design and documentation for Italian SMEs with US subsidiaries. Methods, benchmarking, intercompany agreements, audit defense.
Fixed fee defined case-by-case after a preliminary consultation, based on the transaction volume, the number of jurisdictions involved, the documentation perimeter (TP policy, Masterfile, Country File) and the annual maintenance scope. Audit-defense engagements are scoped separately. The preliminary consultation is a 45-minute paid online session ($250); the engagement letter with the agreed fee is signed before any chargeable work begins.
Yes. Both Italy (art. 26 D.L. 78/2010) and the US (Reg. §1.6662-6) require contemporaneous documentation for intercompany transactions. Italian penalty exemption requires Masterfile + Country File; US documentation reduces accuracy-related penalty exposure. Even a single SRL → US LLC product flow needs basic TP documentation.
It depends on the transaction. CUP works when comparable third-party prices exist. RPM/TNMM suit distributor structures. Cost Plus suits manufacturing or services. Profit Split suits transactions involving valuable intangibles or unique contributions. We select the best method given facts and data availability.
Italy: 90-180% of the disputed tax (reduced to 70-90% with proper documentation). US: 20-40% accuracy-related penalty for substantial or gross valuation misstatement. Add interest, professional defense costs, and the time-value cost of audit duration (typically 2-4 years).
Sometimes — TNMM with a cost-plus markup is common for low-value-adding services. The OECD-aligned safe harbor is generally 5% on costs for routine, low-value-adding intra-group services. Documentation must support the 5% mark-up as arm's length given comparable benchmarks.
Italian Masterfile (group-level): organizational chart, business description, intangibles, financial activities, financial position. Italian Country File (entity-level): controlled transactions, comparability analysis, application of selected method, financial information. US documentation: similar coverage, prepared before the tax return is filed.
Move quickly. The first 90 days set the tone. Fully cooperate, surface the documentation that supports your position, and (if doubled-taxation seems likely) consider preparing for Mutual Agreement Procedure (MAP) under the Italy-USA treaty in parallel. We have run several MAP cases for Italian-US groups.
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IIILEX International Consulting LLC is the Florida-based practice of Avv. Dott. Massimo Leonardi — Italian Attorney (Avvocato), Certified Public Accountant (Dottore Commercialista) and Statutory Auditor (Revisore Legale) with 30+ years of Italian practice. We work exclusively on cross-border matters between Italy and the United States.
IIILEX International Consulting LLC · 7901 4th St N STE 300, St. Petersburg, FL 33702 · us@3lex.us · +1 (786) 604-8764 · +39 335 344 9660