With the approval of the legislative decree transposing ATAD Directives 1 and 2 (an acronym for Anti Tax Avoidance Directive), Italy has taken another step forward in combating aggressive tax planning by large multinational groups. As a reminder, almost all of the new provisions enter into force on January 1, 2019.

The most important changes in the new anti-avoidance bolt for multinationals are those on combating international arbitrage, which exploits the non-alignment of tax disciplines of different countries: from 2020, the tax authorities will in fact be able to disallow the deductibility of costs or make incoming flows taxable if the related amounts have not been taxed or have been deducted in another country.

The only sector that still appears to lack effective regulation, and thus allows multinational corporations (almost all of them American) to pay tax rates of zero percent on their profits, is the digital sector. This is partly because the United States acts as a brake, rather than being the driving force in the fight against avoidance, as almost all the major companies are American.

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