Following the example of other OECD countries, Italy introduced
a voluntary disclosure programme at the beginning of
The deadline for applying under the Voluntary Disclosure
('VD') programme is due to expire on 30 September and
although the Italian Government is mulling over an extension, this
cannot be guaranteed. Therefore, taxpayers should consider acting
The latest developments are set out in two Circular Letters,
which clarify a number of practical issues.
Powers of attorney over bank accounts
With the second Circular Letter (published on 16 July 2015), the
Italian Tax Authority clarified that anyone holding a power of
attorney over a foreign bank account may apply independently under
the VD even if the proxy had never actually been used. Whilst any
income tax violations would be attributed to the beneficial owner
of the account, the proxy holder will be able to avoid any
sanctions for failing to report the existence of the account under
the Italian equivalent of the US Foreign Bank Account Reporting
(FBAR), known as 'Section RW', whereby the account holder
is only required to disclose a pro-rata share of the account. In
other words, for tax reporting purposes, the account balance is
attributed to the main account holder and any proxy holders.
The new guidelines also clarify that certain proxy holders (e.g.
directors in respect of company accounts) are exempt from the VD
Additional taxes covered by the VD programme
In addition, the second Circular Letter extended the ability to
apply IVIE (immovable property tax) and IVAFE (foreign financial
activities tax) violations – introduced in 2012 - to the
Assets held in safes
The Letter mentions that any money held in a safe could be
included in the regularisation procedure. The taxpayer would have
to open the safe in the presence of a notary public and then
deposit the cash into an authorised bank account.
VD versus 'quiet' disclosure
Lastly, the second Circular clarifies that taxpayers may choose
whether to use the Voluntary Disclosure procedure or a different
form of regularisation (so called "ravvedimento
Statute of limitation
In a separate development, on 31 July, the Italian Government
issued a new decree which gave a major boost to Voluntary
Disclosure. In effect, in light of the decree, anyone who applies
under the procedure would be safe from criminal charges.
Finally, the third Circular Letter (no. 30/E), released on 11th
August, offers additional clarification by answering more questions
posed by taxpayers and increased requests for the repatriation of
assets and funds illicitly held abroad.
Firstly, Taxpayers with assets in blacklisted countries will
continue to be monitored in relation to those assets in the years
after their VD application.
Taxpayers must expressly declare any tax amnesties
('scudo fiscale') directly or indirectly linked to
their VD application.
In terms of physical repatriation of assets, the term shall run
from the date of the submission of the application, and proof of
the amount must be provided both before and after repatriation.
In relation to securities – applying a transparent and
non-discriminatory approach –, the same rules as for liquid
assets will be applicable. Therefore, taxpayers in blacklisted
countries will have to repatriate the assets through a fiduciary
company, a so-called 'rimpatrio giuridico'.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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