Transfer pricing rules and intra-group transactions in the digital era: a brief overview from the Italian perspective

Within the framework of international tax law, the advent of the digital age has required a deep and analytical revision of the tools ordinarily used to monitor the transfer pricing policies of multinational companies (MNEs), paying particular attention to their dematerialized transactions. The debate developed within the OECD, exacerbated by the consequences of the COVID-19 pandemic crisis, aims at fighting the transfer of taxable income by MNEs operating in the digital sector towards tax havens, both by downsizing the role of the principle of free competition and introducing new rules on the allocation of profits. Similar needs have also emerged within the European Union, where the European institutions have developed interesting directive proposals aimed both at introducing a common tax base for multinational companies and reducing the base erosion and profit shifting phenomenon. The proposed solutions, although suggestive, appear at present still far from reaching an effective settlement of such challenges, due to both the extreme complexity of the matter and the political difficulty in reaching a shared understanding among all the involved stakeholders.