Italy Pursues Foreign Property Owners

by Ulrika Lomas, Tax-News.com, Brussels

26 March 2010

The Italian Revenue Agency has continued its attempts to trace undeclared foreign assets of Italian residents by writing a letter to those who have been identified as possessing property abroad during its international investigations.

This follows the most recent campaign it launched to recover undeclared funds deposited offshore by 2,000 individuals who, it said, had transferred a total of more than EUR2bn (USD2.7bn) during 2007 and 2008. In this case, the Revenue Agency has sent 6,000 letters to Italian taxpayers who appear to own property in France and the United Kingdom.

From information it has gleaned, the Revenue Agency is looking at properties that were held in the south of France, particularly in the French Riviera, in 2005, and in the United Kingdom in 2008.

In its letter, the Revenue Agency is reminding those residents of the new obligation to declare their overseas assets within their 2009 tax declarations (even if those assets do not produce any income).

It is also inviting them to settle any eventual tax irregularities from previous years. It points out that if, for example, the property has subsequently been sold with a capital gain, the taxpayer should have shown both the asset and the income generated in that year’s tax declaration.

It stresses, in the letter, that the Agency’s activities in uncovering international tax avoidance have markedly increased and, therefore, it considers that now is the right moment for an errant taxpayer to take advantage of the reduced penalties currently available for previous non-declarations.

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