The preparation of the Documentation will not be mandatory, but taxpayers presenting it to the Tax Authorities will enjoy of apenalty protection system. Accordingly, those taxpayers that have presented the Documentation to the Tax Authorities will not be charged of penalties in case of tax assessment leading to a transfer pricing adjustment. Penalties on transfer pricing adjustments range from 100% to 200% of the higher tax assessed.
The Documentation shall be contemporaneous and taxpayers shall timely inform the Tax Authorities of its availability.
An Implementing Regulation from the Tax Authorities, to be issued within sixty (60) days from the conversion into Law of the Law Decree (The Law Decree has to be converted into Law by July 29, 2010), will rule about the following topics:
1. Form and the structure of the Documentation (it is expected that the Documentation Requirement shall follow the EU Code of Conduct and the so-called Masterfile approach);
2. Terms and procedures to be followed by the taxpayers in communicating to the Tax Authorities the availability of the Documentation.
As the Documentation Requirements may also be applicable to prior years, those taxpayers that are willing to prepare the Documentation for fiscal years prior to 2010 shall comply with the content of the Implementing Regulation and give notice to the Tax Authorities within ninety (90) days after the publishing of said Implementing Regulation.