1.The TNMM is applicable for low-risk reseller
With its decision no. 29083 of 4 November 2025 the Italian Supreme Court held that, in line with what the Italian Tax Authorities maintained in their notice of assessment, a taxpayer may apply the TNMM method with the corrective of the ROS (Retun of sales) when determining the fair market value remuneration of a company operating in the retail trade of watches and jewelry.
According to the Italian Supreme Court, the Italian Tax Authorities had adequately justified the need for the use of methods other than traditional methods and, in particular, the TNMM.
In the case analyzed, the group had a single manufacturing company based in Switzerland, while the Italian subsidiary marketed the jewelry products on Italian territory.
This structure involved the sale of low-risk intra-group goods, with reduced risk due to the uniqueness of the production center which operated substantially on orders already confirmed.
In this context, the TNMM method is, in the opinion of the Italian Supreme Court, more fitting than the CUP.
2.Liquidations of a foreign voluntary pension funds are only taxable in Italy
According to the ruling reply no. no. 290 of 12 November 2025 of the Italian Tax Authorities, the sums paid to the heir, resident in Italy, of an Italian and US citizen, resident in the USA, as liquidation of the US pension fund, are only taxable in Italy.
In particular, the deceased held a voluntary individual pension account; with its death, the fund was liquidated to the heir (that withdrew the amounts in the United States).
According to the Italian Tax Authorities, the amount received one-shot by the heir as a liquidation of the pension fund, gross of the withholding tax suffered abroad, has to be qualified as “pensions of all kinds and equivalent allowances” referred to in Art. 49(2) a) of the TUIR and must be subject to separate taxation regime.
3.The mere transport is not sufficient for the VAT exemption to apply
The Italian Supreme Court decision no. 30183 of 16 November 2025 stated that the mere transport of the goods abroad is not sufficient to provide proof of a “triangular” supply within the EU.
In order to apply the VAT exemption regime referred to in Art. 58 of Legislative Decree 331/93, the relevant VAT person is required to provide proof that the transaction was intended from the outset as a national supply with a view to subsequent transport to a purchaser established outside the European Union.
4.The in-bound workers regime may be applied even through an amended tax return
With its decision no. 30569 of 20 November 2025, the Italian Supreme Court allowed a person eligible for the in-bound workers regime to obtain the benefits of such regime through the filing of an amended tax return and not directly through the employer in its capacity of withholding agent.
The approach that seems to be consolidated at an Italian Supreme Court level is that the above-mentioned regime may be benefited from even without submitting a specific request to the employer but by making a request in the tax return or by means of a request for reimbursement, even if the latter is submitted as part of an amended tax return.
5.How to compute employment activities performed in Italy by non-tax residents
With the statement of practice no. 15 of 25 November 2025 the Italian Tax Authorities clarified that, in order to assess the part of the employment activity that is considered to be performed in Italy by non-resident flight personnel (in this case, pilots) operating on international routes involving Italy, the share of the service physically performed in Italy has to considered, including Italian airspace for these purposes. This portion is taxable in Italy pursuant to Italian domestic law (Art. 23(1) c) of the TUIR).
In order to calculate the part of the employment activity carried out in Italy, the taxpayer needs to make a ratio between the hours of work performed in Italy (including Italian airspace) and the total hours of work in the given fiscal year.
6.Supplementary pension fund income is employment income if the recipient is not a pensioner
With the ruling reply no. 296 of 26 November 2025, the Italian Tax Authorities analyzed the treatment of sums received as early redemption of an Italian supplementary pension fund by a person residing in Singapore, who had previously worked in Italy and who, in the year of disbursement of the sums, did not qualify as a pensioner yet.
The Italian Tax Authorities highlighted that, under domestic law, supplementary pension benefits constitute income assimilated to employment income pursuant to Art. 50(1)
h-bis) of the TUIR and, given that the payer is an Italian tax resident, the latter is required to apply a withholding tax.
Further, the Italian Tax Authorities have clarified that tax treaty treatment provided for pensions and “other similar remuneration” (Article 17 of the Italy-Singapore treaty) only applies to persons who may qualify as pensioners. As in the case at stake the person receiving the income did not qualify as a pensioner, the relevant income qualifies as employment income paid by a governmental entity and governed by Art. 14 of the above-mentioned treaty. In the present case, the social security position accrued entirely in the years in which the person was working in Italy: hence the income is therefore taxable in Italy as well.
7.BO and tax residence status must be proved by the taxpayer
The Italian Supreme Court, with its decisions no. 30850 and no. 30855 of 25 November 2025, rules on the proof of tax residence and beneficial owner status for the purposes of the applicability of the reduced withholding tax on fees paid as royalties pursuant to Art. 12 of the tax treaty concluded between Italy and Switzerland.
The Court emphasizes, in particular, that the burden of proving the status of beneficial owner and tax residence lies with the taxpayer, since it is not sufficient to exclude that the foreign company is a simple intermediary or intermediary in order to be able to benefit from the reduced tax treaty rates.
8.Different treatments between local and foreign foundations may be justified
The European Court of Justice, in its decision of 13 November 2025 in Case C-142/24, affirmed that a national legislation that, in connection to the transfer of assets to a family foundation, taxes such transfer providing for lower deductions from the tax base and higher tax rates if the foundation is established abroad by a resident founder compared to those applied to family foundations set-up in that State if the more favorable tax treatment assigned to the latter is aimed at offsetting the tax levy that they (unlike foreign foundations) suffer by way of substitute inheritance tax is compatible with the EU principle of the free movement of capital.
9.Withholding refunds may not be refused if the exchange of information mechanism applies
According to the decision of European Court of Justice n. C-525/24 dated 27 November 2025:
• do not conflict with Art. 63 TFEU the laws of the Member States (in this case, Portugal) allows for a reduced withholding tax on dividends paid to non-resident pension funds to the issuance of a declaration attesting to the existence of the requirements for the aforementioned reduced levy, confirmed and certified by the authorities in charge of the supervision of pension funds in their respective States of residence; this, to the extent that those authorities have the necessary powers and competences to make such a declaration and it can be obtained within a reasonable time-frame;
• on the other hand, it is an unlawful restriction of the free movement of capital principle the circumstance that such a declaration is an essential element for the purposes of the reimbursement of withholding taxes already withdrawn: in this situation, in fact, the counterparty of the pension fund is not the company that distributes the dividends, but the tax authorities of the other State, which can verify the relevant information through the exchange of information mechanism.
10.OECD amends the Commentary to give guidance on remote working and PEs
The OECD has published an update document that contains important clarification regarding the OECD Commentary on the OECD Model Convention.
Particularly significant are the amendments to the OECD Commentary on Art. 5, introduced in paras. 44.1 to 44.21 which provide for the guidelines to assess whether a person who works in a foreign State remotely (at home or in another place of business) for a company resident in the other State may give rise to a permanent establishment of the latter.
According to the OECD, there are two main factors that have to be taken into account: the time factor (i.e., how much of the total amount of working time carried out from home or from a place of business that does not coincide with premises that are typically part of the company) and the “functional” factor (i.e., what are the motivations for which the person works from that particular place).
11.Public consultation on the new OECD document on mobility of individuals
The OECD document “Global Mobility of Individuals” has been issued for a public consultation period, until 22 December 2025. The document investigates a series of issues concerning the mobility of workers that could have consequences on the application of various tax treaty provisions.
With respect to the workers, the main issues concern:
• the tax residence of the person;
• the territoriality of the income produced;
• the possible different classification of income (from employment or self-employment) in the jurisdictions concerned;
• the interrelations with national allowances or rules aimed at attracting qualified personnel or digital nomads.
In relation to the employer’s position, the issues examined concern:
• the possibility that the remote worker give rise to a permanent establishment (physical permanent establishment or agency permanent establishment) in the other State;
• the residence of the company, especially in situations where the board of directors and/or the shareholders’ meeting are held remotely;
• potential transfer pricing issues.