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Italy Can Use Offshore Account Holder List

by Ulrika Lomas,, Brussels

07 August 2012

While, in October last year, an Italian court near Turin had adjudicated that the list containing details of foreign account holders taken from HSBC in Switzerland could not be utilized by the Italian tax authorities, the provincial tax court in Treviso has now said that it can.

IT expert, Hervé Falciani, admitted to passing the information, including details of 7,000 accounts held by Italians in Switzerland in 2005 and 2006, to the French tax authorities in July 2008. Last year, following a request to the French prosecutor in Nice, those details were obtained by the Guardia di Finanza, the Italian financial police.

It had been expected that the names of Italians identified from the list would enable the Guardia di Finanza, together with the Italian Revenue Agency, to open new lines of investigation, or re-open dormant enquiries, on the movement of Italian funds in Switzerland.

However, after various delays, a court near Turin threw out the case against a presumed individual tax evader on the grounds that the list of accounts was obtained illegally by Falciani, and could therefore not be used in evidence. It was said that the taking of the list could be classified as an aggravated embezzlement, and was the illicit collection of information contained in a computer system.

However, the court in Treviso has now issued a contrary opinion regarding a case against two other individuals who contested assessments by the Revenue Agency of increased tax, interest and penalties of around EUR360,000 (USD445,000) in one case and almost EUR2m in the other.

The tax court considered the acquisition of the data to be completely legitimate as it was obtained following a request to the French tax authorities, through the normal channels of collaboration and fully respecting the necessary procedures and agreements. In particular, the data was acquired within the exchange of tax information stipulations foreseen in European directives and the double taxation agreement between Italy and France.

It also confirmed that the possibility that the list was obtained illegally by Falciani in Switzerland could not be transferred and used to prove its illegality in an Italian court. In fact, it added, on the one side, there could not be assumed a right of secrecy for any Italian citizen's undeclared foreign bank account, while, on the other, the information had not been obtained in violation of any Italian laws or by an action by the Italian tax authorities.

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 and a description of the report can be seen at
TAGS: individuals | court | compliance | tax | offshore confidentiality | double tax agreement (DTA) | tax compliance | law | banking | enforcement | offshore | agreements | offshore banking | banking secrecy | Italy | penalties | individual income tax

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