The European Court of Justice blessed international tax arbitrage in a VAT transaction by means of which taxpayer was able to obtain a credit for input VAT on purchases while avoiding payment of output VAT on sales. The result was obtained thanks to an inconsistent characterization of the transaction for VAT purposes under UK and German law. UK treated the transaction as a financial service taxable in the country of supplier (Germany), while Germany treated it a as a sale of goods taxable in the country of the goods are sold (UK).
Continue Reading ECJ Blesses International Tax Arbitrage Transaction

A decree presented to the Italian Council of Ministers today will introduce new provisions on contemporaneous documentation for transfer pricing purposes and a new black list with a duty to disclose any transaction carried out in or with any black listed countries to the tax administration. Also, the minimum threshold for the duty to report cross border transfers of money will be reduced to euro 5,000.
Continue Reading Italy’s Government to Approve New Rules on Transfer Pricing Documentation, Anti Tax Abuse

Italian Supreme Court in judgment n. 8487 of April 8, 2009 placed upon taxpayers the burden to prove the existence of valid economic reasons to avoid the application of anti abuse provision and denial of tax benefits in tax avoidance transactions. The decision contradicts a previous ruling, n. 1465 issued on January 21, 2009 in which the burden of proof was placed upon the tax administration.
Continue Reading Italian Supreme Court Held That Burden of Proof in Tax Avoidance Cases is Upon Taxpayers