Italy: Local File only in Italian Language

published on 23 August 2024 | reading time approx. 1 minute

In their reply (“Risposta all' interpello” n. 174/2024) dated 21 August 2024, the Italian Tax Authorities clarified once again that the “Local File” is only accepted in Italian (with the exception of autonomous regions where there are other official languages, such as German in South Tyrol). The Master File, on the other hand, can also be created in English.

This makes it clear once again that the Italian Tax Authorities focus not only on the substance of transfer pricing documentation, but also strongly on the form. In this respect, it is important to note that the other form requirements (including: specific table of contents, indication of the existence of the transfer pricing documentation in the tax return, digital signature and separate digital time stamp on the transfer pricing documentation within the binding deadline, etc.) and the time requirements (Note: for 2023, the current deadline is 10 months after the end of the financial year, e.g.: 31 October 2024 for financial years ending on 31 December 2023) must be met in order for the documentation to be considered complete and usable and thus to be granted the so called “penalty protection” (penalties between 70 percent, 90 percent and 180 percent of the additional tax determined during a tax audit due to a transfer pricing adjustment).