Tax Transparency


Italy Tax Hikes.  The Italian Revenue Agency announced with a Circular in December 2013 that from now on taxpayers will have to declare on their tax forms all funds held at another jurisdiction, making clear that the prior threshold of €10,000 is not applicable anymore.


The above Circular was passed in combination with the latest adjustments in order to unite Italian regulations with the European law and especially aiming to secure compliance with the responsibility to declare all funds held abroad to the respective tax authority of the other member countries.


The new responsibility of the tax payer now is to declare all assets and investments as well that are held outsight the country, whilst the previous regulation ordered to collect information regarding transfers to non residents and from non residents, a regulation which no longer applies.


The taxpayers are considered to have an “effective title” if they have control for over 25% minimum of a business’s assets and the €10,000 limit under which a declaration was not demanded before is no longer in force.


This new regulation has some exemptions, i.e. if Italian residents working for the Italian Government in a foreign country or if they work near the borders or even in a neighboring country, are exempted from the above regulation. This exemption applies as long as they are working under such circumstances for the bigger part of the tax year and the taxpayer brings back into the country all assets held abroad during that period.


Another exemption from the above regulation is if a taxpayer assigns all his/her assets to an Italian financial intermediary is not obligated to follow the procedures of this new regulation.


If one fails to make the required declaration according to the above regulation the penalty fees will be reduced to between 3% AND 15% of the amount of funds undeclared to which is added the risk of confiscation for the full value.


Those sanctions are now increased to 6% up to 30% if the undeclared assets are held in a “tax haven” jurisdiction on the black list of Italy.


However under special circumstances, reduced sanctions, down to one half of the above minimum amount are available and a fine of just 258 will be imposed if and when the required declaration is presented in a period of 90 days passed its due date.




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