Italy Launches Tax Amnesty

by Ulrika Lomas, Tax-News.com, Brussels

17 September 2009

Italy’s Revenue Agency (Agenzia delle Entrate) has issued the necessary forms to be completed to make declarations under the country’s new tax amnesty.

A penalty of, effectively, 5% will be imposed under the amnesty on repatriated or declared funds held by Italians abroad. The penalty will be payable on capital held abroad up to December 31, 2008, and repatriated or declared from September 15, 2009 to April 15, 2010.

The new documentation is to be completed by all private individuals, partnerships or non-commercial associations (but not limited companies) resident in Italy, who have not previously made the appropriate annual tax declaration of external assets held abroad, but who now intend to do so. Under the amnesty, the two possible options for previously undeclared assets are:

• repatriation – the requested transfer to Italy of deposits or other financial assets currently held in various European or non-European countries; or
• regularization – the declaration of deposits or other financial assets, and foreign investments, such as property, precious objects, yachts, pictures and other works of art, held in European Union countries (or countries in the European Economic Area which guarantee an effective exchange of tax information), for which no physical transfer to Italy is requested.

It is expected that the availability of the regularization option will shortly also be extended to countries with whom Italy has a tax information exchange agreement that meets the internationally-agreed OECD standard.

The form of declaration should be presented, together with the repatriated assets, if applicable, to an Italian-resident intermediary, i.e. a bank, a stockbroker, an investment fund, a trust company, an exchange bureau, or the Italian Post Office. The exchange rates into euro to be used for the purposes of the declaration have been predetermined by the Italian authorities, and are attached to the declaration forms, which are available from the Agency’s website.

It has been noted, however, that the amnesty is only available for capital which is declared before any investigation is launched by the authorities. In that regard, the Revenue Agency has formed a “task force” of 50 highly specialized agents, who in collaboration with the Financial Police (Guardia di Finanza), will investigate possible undeclared assets held in other jurisdictions.

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