The Italian government has introduced a “temporary web tax” which will be in force until the long-awaited OECD/EU strategy for the reshaping of traditional taxation systems based on the residence of companies (or on the location of permanent establishments) has been defined. Said reshaping is aimed at introducing taxation principles more tailored to the digital business models (relying on a new criterion based on the company's "significant presence" in the economy of a country other than that of its tax residence).
This “temporary web tax” takes the form of an optional procedure designed for multinational groups who wish to evaluate the risk of being found to have a permanent establishment in Italy and is aimed at the definition, in collaboration with the Revenue Agency, of their tax position in relation to the periods for which the deadlines for the submission of tax returns have expired.
The procedure is divided into two phases:
- assessment of the existence of the permanent establishment;
- determination of the profits and losses related to the hidden permanent establishment in relation to all fiscal years still open to assessment.
The procedure involves any MNE irrespective of the business sector (not only digital economy) provided that the MNE:
- is part of a multinational group with a consolidated worldwide turnover higher than EUR 1 billion per year;
- sells goods or provides services in the Italian territory for an amount higher than EUR 50 million per year also through other Italian resident subjects belonging to the same multinational group.
Access to the procedure is excluded in cases of ongoing inspections, tax audits or any other administrative or criminal procedures carried out by the competent authority regarding any potential hidden permanent establishment.
The following benefits are granted:
- reduction of administrative penalties to 1/6 of the minimum;
- non-application of criminal penalties;
- automatic access to the "cooperative compliance" procedure that promotes an enhanced cooperation between the Italian Tax Administration and taxpayers in order to prevent and easily resolve tax disputes.
Any MNE can also submit a request to the revenue Agency for a prior agreement aimed at evaluating the existence of a permanent establishment in Italy for the current and future fiscal years.