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Italian Gelato Firm Wins Tax Dispute in High Court
16 Jun
Summary
- Montebianco's cost-plus method upheld by Italy's Supreme Court.
- Court cited significant US affiliate personnel costs.
- Comparable uncontrolled price method still has implicit preference.
The Italian Supreme Court has ruled in favor of Montebianco S.p.A., an Italian gelato and pastry group, concerning the transfer pricing method applied to its transactions with its US affiliate. The ruling, published over the weekend and dated June 5, confirmed that Montebianco's reliance on the cost-plus method was justified.
According to Italy's Corte Suprema di Cassazione, the cost-plus method correctly accounted for significant personnel costs borne by the subsidiary, Montebianco USA. This was a key distinction from other markets where Montebianco directly managed such expenses. The court acknowledged an ongoing implicit preference for the comparable uncontrolled price method.
