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    Tuesday 19 March 2019

    Deductibility of management fees in Italy

    In a recent decision by the Lombardy Regional Tax Court, the absence of dedicated personnel in an Italian subsidiary is a key element for deducting management fees paid to its parent company for strategic, accounting and general management services.

    The Italian company – belonging to an international banking group – independently performed fund management activities only, whilst all other services were necessarily outsourced and hence were rendered by the parent company.

    The Court recognised that these services did not represent any duplication of other functions performed in-house by the Italian company. In fact:

    • if those services had not been rendered by the parent company, the Italian entity would have acquired them from third parties anyway
    • the intercompany charges were supported by a “cost contribution agreement”
    • the pricing proved to be in line with OECD requirements. 

    This decision confirms recent Italian jurisprudence on this issue.

    For more information, contact:

    Gian Luca Nieddu 
    Hager & Partners, Italy
    T +39 (02) 7780711
    E gianluca.nieddu@hager-partners.it

    Federico De Rosa
    Hager & Partners, Italy
    T +39 (02) 7780711
    E federico.derosa@hager-partners.it

    www.hager-partners.it

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