With the signing of the exchange of information agreements between Italy and Switzerland, Liechtenstein and the Principality of Monaco, the Italian voluntary disclosure program has been ratified, allowing Italian taxable entities or individuals, who own and hold assets and investments abroad in violation of the fiscal monitoring regulations, to regularize their assets and activities, held in Italy and abroad, and comply with Italian tax regulation.
The term to comply expires on September 30, 2015.
The program contemplates the payment of the Italian due taxes and the application of reduced penalties, in order to rectify the failed income tax statement and the non compliance with the fiscal monitoring regulation, thus avoiding (highly possible) potential risks deriving from what the Italian Tax Authorities can gather from the exchange of information on deeds or events occurred from the date of the exchange of information agreements.
According to the articles issued by the trade press, foreign credit institutions can make the continuation of the existing bank and deposit accounts subject to the confirmation of compliance of the owner from the Italian Tax Agency.
With particular reference to Switzerland, Liechtenstein and the Principality of Monaco, the execution of the agreements on the “automatic exchange of information” will delete such countries from the so-called “black list” and will allow taxpayers to benefit from significant incentives on penalties (reduced up to 16,6%) and on taxable periods (from 2010 to 2013 or from 2009 to 2013 in cases of faulted submission of tax return statement).
Individuals, non commercial entities and small companies residing in Italy during the taxable years (from 2010 to 2013 or from 2009 to 2013) can benefit from this program.
With particular reference to non commercial entities, it is worth mentioning that the Italian tax regulation provides for specific anti-elusive dispositions in order to determine the fiscal residence of trusts and institutes which have the same content in countries that do not allow the exchange of information, foreseeing, in addition to general criteria (registered office in Italy – administration office in Italy – main object of the activity carried out in Italy for most of the taxable period), some “presumptions” that, if not proved otherwise, can lead such entities to be regarded as entities fiscally residing in Italy.
As a consequence of this presumption, the income of trusts or similar institutes, regardless of their location, becomes taxable in Italy under the worldwide taxation principle with all relative effects in terms of violations of statement obligations and, in particular, of tax monitoring regulations.
If the violations are not rectified with the voluntary disclosure, the ordinary regime will apply, providing an extension of the taxable annuities, the application of a penalty regime far more burdensome and fiscal crimes prosecution, with particular attention to the “self-laundering” crime, for which an eight-year-sentence is foreseen.
The ratification of the procedure, in case of the violations carried out until December 31st 2014 and enforceable by September 30th 2015, will focus on all assets and activities and all taxable periods for which the evaluation or contestation terms of the tax statement violation have not expired.
Finally, with regards to the accepted payment methods, the regulation of the disclosure provides for the deposit of the amount in one installment, or in three monthly installments of equal amount.
On that note, it is important to underline that the failed deposit of even one installment will cause a reversion of the procedure effects.