The Supreme Court upheld the appeal of Domina, duly assisted by the Firm, regarding the criteria for determination of the income of an Italian permanent establishment of the Egyptian company belonging to the group, active in developing tourist properties. The Supreme Justices, adhering to the constitutionally oriented interpretation proposed by the defence team, stated that, also in relation to permanent establishments, the reconstruction of the taxable income must be carried out net of all production costs, allowing a reconstruction that is also inductive/presumptive. This under penalty of violation of the constitutional principle of ability to pay and the OECD rules governing the determination of the income of the permanent establishment. The case was referred to the Regional Tax Court of Milan in order to redetermine, also using its investigative powers, the assessed income to be paid by the permanent establishment in application of the aforementioned principle (thus taking into account, in particular, the construction costs of the properties sold). The Firm’s defence team was composed of partner Cristiano Caumont Caimi and associate partner Laura Puddu.