The crime of unfaithful declaration is excluded for transfer price adjustments

The Regional Tax Commission of Milan, with sentence no. 3674 on 4 september 2018, stated that no consequences on the penal-tax level can derive from a transfer pricing adjustment.
The judges have denied the application of the rule of doubling of the terms of assessment, in case of criminal relevance, to the case of adjustment to income resulting from the recalculation of the transfer prices charged by the company because this type of adjustment is based on valuation and discretionary methods.
The current discipline of the crime of unfaithful declaration (article 4 of Legislative Decree n. 74/2000) excludes the relevance, for the purpose of exceeding the thresholds, of the “evaluation of positive and negative elements of income that are objectively existing, to which the applied criteria were however indicated in the financial statements or in other documentation relevant for tax purposes”. Therefore, the Regional Tax Commission considered that the application of a different transfer pricing analysis method, implying discretionary assessments, could not follow up a legitimate denunciation on the tax payer.