Voluntary Disclosure In Italy For Capital, International And Domestic Income Tax Compliance

By Roberto Salin of LEGALITAX Studio Legale e Tributario in Padova, Italy

This article aims to illustrate the introduction of the voluntary disclosure procedure into the Italian system in order to enable non-compliant taxpayers to come forward and declare capital and income held in Italy and abroad in breach of the duty to report and pay tax in their annual income tax return. The introduction of voluntary disclosure is part of a wider political legislative strategy which has been developed in the last fifteen years in response to the financial crisis which hit sovereign debt and the changing face of international finance. Voluntary disclosure aims to combat international fiscal crimes and recover a large amount of taxes which have been evaded over the years. These strategies are the culmination of choices made by the legislator which had previously neglected the fight against international fiscal evasion by almost constantly favouring amnesties and tax shields allowing taxpayers to remedy income tax evaded over the years in complete anonymity whilst benefitting from lower tax rates. This only served to highlight the state’s complete lack of ability to perform its supervisory duties and underlined Italy’s shortcomings on the international stage with regards to the exchange of information which was further suffocated by the existence, in some foreign states, of banking secrecy blocking the identification of “undisciplined” taxpayers who had taken capital abroad without declaring the same in their own countries, in clear breach of regulations on fiscal monitoring. Italy, faced with this changing international situation was forced to draw up a strategic plan to intensify the exchange of information and introduce the voluntary disclosure system and the crime of money-laundering.

On 15th December 2014 Law no.186 brought the voluntary disclosure procedure into force for the first time in Italy. This legislation allowed taxpayers to voluntarily adhere to said collaboration and render their position compliant by the deadline of 31^st December 2015. Legislative Decree no. 193 dated 22nd October 2016 re-opened the terms of the previous procedure and permitted taxpayers to participate in the collaboration by the deadline of 31^st July 2017.

This article, after a brief recap on the changing international situation, will illustrate the main aspects of voluntary disclosure in Italy, including the new aspects introduced by Legislative Decree no. 193 dated 22nd October 2016. This brochure will also fully describe the tax periods laid down within the procedure, tax penalties, benefits, formalities, the cost of the procedure and finally Legalitax’s approach when assisting clients to illustrate the procedure and ensure that it is completed correctly and is able to achieve the desired effects.

To read the full article, click Voluntary Disclosure In Italy.