Milan, 28 February 2022 - Studio Tributario Tognolo (STT) assisted Pirelli in four advance transfer pricing agreements, three of which bilateral and one unilateral relating to the sale and purchase prices of products and services within group’s entities.
Pirelli has signed three bilateral agreements (Bilateral Advance Pricing Agreement, BAPA) and one unilateral agreement (Advance Pricing Agreement, APA) - with the Italian competent tax authority. Pirelli has also promoted three further bilateral agreements (BAPA) between Italy and the main countries in which it operates, as well as three unilateral agreements (APA) with the Italian competent tax authority, whose preliminary activities are still in progress.
The partners Paolo Tognolo and Francesco Spurio assisted Pirelli in concluding the agreements and in the various phases of the procedures, from the early stages of the applications to the conclusion of the agreements, signed in 2021.
Currently, STT works alongside Pirelli Group to support them in the project they launched in 2016, which allows to cover most of the intercompany transactions in Europe and North America and, in the future, those in the APAC area.
BAPA is a very effective tool for multinational groups to eliminate uncertainties in the determination of their transfer pricing policy. Prices are defined on the basis of objective criteria, fully shared with the involved competent tax authorities, thus avoiding, from the very beginning, the double taxation phenomena in case of local inspections and audits.
Signing these Agreements is also important to the tax administrations involved, as it allows the authorities to guarantee in advance the correct tax base allocation and apportionment between the various entities of the multinational groups.
Paolo Tognolo, founder and name Partner of Studio Tributario Tognolo comments: “In the past few years the importance of dialogue tools with the tax authority - and between this latter and the foreign tax authorities - has increased considerably as a result of the need for certainty that multinationals groups have when acting in a constantly evolving context. To effectively mitigate or completely eliminate the risk of international double taxation, it is necessary to acquire in-depth knowledge of the operating methods used by tax authorities, define a tax strategy consistent with the business model and present oneself before the competent tax authorities with a solid and proven model for determining transfer prices, in order to reach an agreement that is advantageous for all the parties involved”.