San Marino and Italy have completed an agreement covering financial collaboration, but there has been no indication as to when the double taxation agreement sought by San Marino would be signed between the two countries.
The signed financial agreement was regarded, by the government of San Marino, as providing future stability to the financial sector in the country, following a period of turbulence within the management of its banks and given the loss of a significant portion of their deposit base to the current Italian tax amnesty.
The losses had been officially estimated at some EUR1.2bn (USD1.8bn) by mid-November (but are expected to reach at least EUR2.2bn), out of total bank deposits of around EUR13.6bn.
The financial agreement is expected be cemented by an exchange of memoranda between the Bank of Italy and the Central Bank of San Marino. This is intended to encourage the development and integration of the two countries’ banking systems, and lead to stability, integrity and transparency within them.
There will be particular collaboration with regard to controls over the banking, financial and insurance sectors, financial analysis, checks on the movement of cross-border funds and assets, and mutual investigations against criminal and money laundering activities.
The agreement will also allow banks from each country to operate in the other, subject to all the necessary authorisations and regulations.
With regard to the expected subsequent signing of a DTA between Italy and San Marino, the latter’s government has expressed a wish that it would be completed as soon as possible. Until then, under the Italian tax amnesty repatriation of funds to Italy (rather than regularization) will be the only option for Italians with undeclared deposits in San Marino, as the two countries do not have a bilateral agreement to include the internationally agreed standard for the exchange of information for tax purposes.
There appears to be little left to discuss on the terms and conditions of the DTA but, despite a further meeting in Rome, after the completion of the financial agreement, it has not yet been signed. The expiry of the Italian tax amnesty is presently fixed for mid-December (although there have been recent suggestions that it could be extended).
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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