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Malta, Cyprus Off Italian Blacklist

by Ulrika Lomas,, Brussels

02 August 2010

The Italian Ministry of the Economy has issued amendments to the relevant legislation, by which Malta and Cyprus have been removed from the country’s ‘blacklist’ of tax havens.

The Ministry has made the appropriate changes to all three lists of countries considered to have tax systems which favour the avoidance of taxation - that concerning the residence of individual taxpayers; the list valid within the tax legislation concerning controlled foreign companies (CFCs); and that regarding the non-deductibility of corporate costs and expenses.

Cyprus and Latvia have also been eliminated from the blacklist of countries with which Italy does not have a sufficient level of tax information exchange, while South Korea has been taken off the CFC and corporate cost lists.

Malta and Cyprus, which are also full member states of the European Union, will now have fully ordinary fiscal status as far as the Italian tax system is concerned. In particular, with effect from this tax year, those Italian individuals who have attempted to transfer their residence to one of those countries will not have a continued presumed residence in Italy, while there will be no additional tax consequences for those Italian businesses with subsidiaries or associated companies in Malta or Cyprus.

The changes to the lists are also significant with regard to the new Italian value-added tax (VAT) reporting requirements that were announced in April, for all 'risky' import and export transactions above EUR50,000 (USD65,400), particularly those transacted with countries considered not to have a sufficient level of tax information exchange.

Under the new rules, the details of transactions in goods and services from companies or individuals having an establishment, residence or domicile in those countries will have to be forwarded electronically to the Italian Revenue Agency. As it stands, therefore, transactions with Luxembourg, Liechtenstein and Switzerland in Europe will still have to be reported when the system comes into effect.

Although those VAT arrangements have now probably been delayed from August 31 until October 31, it should also be noted that San Marino remains on the blacklist, despite all of its efforts to negotiate with the Italian government on what remains to be done before it can regularize its standing with Italy.

A comprehensive report in our Intelligence Report series tracing in detail the course of the last six years both globally and at jurisdiction level, explaining precisely what you get - and don't get - for your money in all of the main offshore jurisdictions, is available in the Lowtax Library at and a description of the report can be seen at
TAGS: individuals | compliance | tax | business | value added tax (VAT) | tax compliance | Malta | law | Latvia | offshore | legislation | Cyprus | Italy | Korea, South

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