Italian Revenue Agency Confirms Details Of Tax Amnesty Extension

by Ulrika Lomas, Tax-News.com, Brussels

03 February 2010

Italy’s Revenue Agency has issued a circular that confirms the terms of the extension to end-April 2010 of the Italian tax amnesty for undeclared funds held abroad.

The Ministry of the Economy originally announced an extension of the tax amnesty after its original expiry date on December 15, 2009. The circular contains a ratification of the increased penalties that will now be imposed on Italian individuals who repatriate or regularize undeclared funds. Before the original expiry date, the penalty was 5%. Now, the penalties are 6% for funds declared between January 1 and end-February 2010, and 7% for declarations from March 1 to April 30, 2010.

The tax amnesty remains valid for assets held abroad and undeclared as at December 31, 2008. It is also confirmed that, if there happen to be obstacles beyond the control of the taxpayer to the effective completion of the repatriation or regularization before April 30, the period up to end-December 2010 is available for all matters to be finalized.

Individual taxpayers, who present a declaration of funds held abroad under the tax amnesty after January 1, are excused from making the declaration of foreign income or assets under their annual tax returns for 2009 and 2010. As they will continue to be held abroad, regularized assets will be the subject of such tax return declarations in succeeding years.

Finally, it was noted that the decree confirming the extension of the tax amnesty has altered the Italian tax regulations against assets held in countries considered as tax havens. There will now be a presumption in law that investments and financial assets held in such countries have been accumulated from income that would have been subject to income or value added taxes in Italy, unless the taxpayer can prove otherwise.

Such a presumption has consequences with regard to the longer period available to the authorities for their investigations of each case, and to the increased tax penalties that could be involved. Those consequences are avoided for assets declared under the tax amnesty.

Recommended