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Italian Tax Amnesty To Include Domestic Cash Holdings

by Ulrika Lomas, Tax-News.com, Brussels

20 October 2016


The Italian Government has proposed including undeclared domestic assets, including cash and bearer bonds, in a relaunch of its voluntary disclosure program (VDP) next year.

A reopened VDP, as announced at the same time as the 2017 Budget on October 15, is forecasted to yield a further EUR2.6bn (USD2.9bn). It is expected to open from January 1, 2017, after the original program that closed on November 30 last year provided EUR4bn in additional tax revenue.

Under the VDP, participants have to agree to pay all outstanding taxes when declaring their assets, but are then subject to much-reduced administrative and criminal penalties.

Within its new provisions, declarations of previously unreported cash holdings in Italy will be subject to a 35 percent withholding tax, and to an investigation by the Italian Revenue Agency to ensure the assets are not the fruit of fraud or money laundering.

Both Premier Matteo Renzi and Minister of the Economy and Finance Pier Carlo Padoan have stressed that the terms of the VDP are therefore "a long way from being comparable to a tax amnesty."

The VDP, it has been suggested, is being offered in advance of the start of exchanges under the OECD's new international tax transparency standard, the Common Reporting Standard.

TAGS: money-laundering | compliance | tax | value added tax (VAT) | tax compliance | law | legislation | tax rates | withholding tax | Italy | penalties

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