Some Remarks on the Notion of Permanent Establishment in the Recent Italian Supreme Court Jurisprudence

Abstract

Even after the very well-known Philip Morris case, the jurisprudence of the Italian Supreme Court on PE matters is still controversial and not always in line with settled international standards. The present article focuses on two recent Supreme Court's judgments. In Voith Paper the Court draws interesting - and a bit surprising - conclusions on the identification of the entity liable to corporate income tax in cases of Italian resident subsidiaries acting as PEs of non-resident parent companies, affirming that Tax Authorities can well serve the tax assessment regarding the existence of the PE and the ensuing attribution of profits to it on the resident subsidiary. In Boston Scientific International the position of the Court regarding the existence of a PE in commissionaire structures seems coherent both with settled OECD interpretations and recent jurisprudence of other OECD Member countries, attributing relevance to the substantial elements of functions performed and risks borne respectively by the principal and the commissionaire. In this respect, this second judgment is very welcomed.