Italian Tax Police Film Cars Crossing Swiss Border

by Ulrika Lomas, Tax-News.com, Brussels

22 February 2002

Last week Italy extended until June 1st the deadline for its tax amnesty on the repatriation of illicit funds stashed in tax havens abroad, but yesterday Italy's tax police yesterday began filming all cars going across the border with Switzerland. Just in case! After the deadline expires, tax inspections will be redoubled and fines increased.

Italy is one of seven EU countries which offered amnesties to undeclared currency holdings in the run-up to launch of the euro. The Central Bank's head of fiscal services, Carla Panzeri, said that large sums had been repatriated, including one individual payment of 50 million euros, although he added: "The fiscal shield is not an amnesty. It does not mean that we are ending any legal action currently underway." But returning money is charged a tax of just 2.5%.

The Bank thinks that up to 500 billion euros is illegitimately sitting abroad in tax havens, and hopes that 10% of it might flow back under the scheme, which originally ran until February 28th, when the lira ceases to be legal tender.

Soon after the launch of the scheme, Deputy Economy Minister Vito Tanzi said: "Perhaps we will reach 40 billion euros, which would represent 4% of Italy's GDP." The country's biggest banking group Intesa-BCI believes 50 billion euros is likely to be repatriated, while Italy's second largest bank Uni-Credito puts the likely figure at 75-100 billion euros. "If these estimations are confirmed, it would represent an extraordinary success," said Tanzi.

For its part, Switzerland has been stepping up its efforts to co-operate with the EU countries that surround it. At the end of January, Swiss Justice Minister Ruth Metzler, and the French Interior Minister Daniel Vaillant met in Geneva to sign a protocol for establishing Centre for Police and Customs Cooperation (CPCC), which is expected to open this summer.

T Centre will aim to provide a rapid exchange of information between the customs and police forces of the two countries. Ms Metzler revealed that there was 'already good cooperation' between the two countries in this area. However, she added that: 'This centre will faciliate cooperation, because there are currently certain judicial and administrative obstacles.'

According to reports, the CCPD will be staffed 24 hours a day, and will have a staff of 20-40 from each country. There are plans in the pipeline for a similar facility to be built in order to aid cooperation between Switzerland and Italy, but this project has now been delayed several times.

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