The Ministry of the Economy has announced an extension of the Italian tax amnesty for undeclared funds held abroad as at December 31, 2008. The original expiry date was December 15, 2009; the new maturity date is April 30, 2010.
The amnesty has been extended with increased penalties from the 5% that was imposed on Italians who repatriated or regularized undeclared funds before the original expiry date. 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.
In fact, by being extended for four months, the tax amnesty, which was reduced to only three months from the initially-proposed seven months when it was introduced in September, has actually now been returned its originally-proposed maturity date.
The government is keeping to the official line that the amount of funds declared under the amnesty had reached over EUR80bn (USD114bn).
However, most observers have concluded that the re-entry of funds by December 15 will prove to have reached at least EUR100bn, meaning additional tax penalty revenue of about EUR5m. In any event, it is expected that the declared funds from this, the third, Italian tax amnesty will prove to be much larger than the total EUR78bn repatriated under the first two amnesties.
The estimate from other financial experts is that a further amount of EUR30bn will be found to have been declared by end-April next year. They also expect that new declarations will largely consist of foreign company shareholdings, rather than the liquid funds that have been the easiest to declare to date.
Emma Marcegaglia, the President of Confindustria (the Italian Business Federation), welcomed the extension of the tax amnesty. She said that Confindustria had always looked on it as a “necessary evil” which, it was hoped, would provide extra resources to be used in the recapitalization of businesses in Italy. As there were further funds to be repatriated, its continuation was justified, as were the increased penalties.
A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.aspTags: Italy
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