S
SysOp
The Italian Revenue Agency has confirmed that repatriation is the only possible means of entering into the current tax amnesty for undeclared assets held in the EU or in countries that do not have a tax information exchange agreement (TIEA) with Italy the meets the OECD standard.
More specifically, according to a Revenue Agency circular, repatriation is only possible for declaring assets held within the European Union (EU) or assets held in countries with a TIEA and forming part of the European Economic Area (EEA).
Therefore, while the choice of repatriation or regularization is available from all countries in the EU, that choice is also possible for assets held in, for example, Norway and Iceland, even though they are not EU members, because they are in the EEA and have a qualifying TIEA with Italy.
Having the choice of regularization becomes of obvious importance if the undeclared asset held abroad is not readily saleable at the right price in present markets. Such assets could be, for example, fund investments or works of art, property or factories, yachts or assets held jointly with other investors.
According to most ideas of where the majority of Italian undeclared funds are held, this ruling within the tax amnesty is likely to affect primarily assets in Switzerland, San Marino, Liechtenstein and Monaco. In fact, the explanatory circular issued by the Revenue Agency mentions those countries specifically by name in its description of those areas for which regularization is the only means available.
It has been seen recently that San Marino, in particular, has been attempting to negotiate a TIEA with Italy. In the absence of such an agreement, estimates of the reduction in San Marino’s bank deposits as a direct consequence of the tax amnesty range from the optimistic at only 15% to the pessimistic at 40%.
On the other hand, it is reported that the Swiss government has not yet replied to the Italian proposal for a TIEA amendment to be added to the existing double taxation agreement between the two countries.
More specifically, according to a Revenue Agency circular, repatriation is only possible for declaring assets held within the European Union (EU) or assets held in countries with a TIEA and forming part of the European Economic Area (EEA).
Therefore, while the choice of repatriation or regularization is available from all countries in the EU, that choice is also possible for assets held in, for example, Norway and Iceland, even though they are not EU members, because they are in the EEA and have a qualifying TIEA with Italy.
Having the choice of regularization becomes of obvious importance if the undeclared asset held abroad is not readily saleable at the right price in present markets. Such assets could be, for example, fund investments or works of art, property or factories, yachts or assets held jointly with other investors.
According to most ideas of where the majority of Italian undeclared funds are held, this ruling within the tax amnesty is likely to affect primarily assets in Switzerland, San Marino, Liechtenstein and Monaco. In fact, the explanatory circular issued by the Revenue Agency mentions those countries specifically by name in its description of those areas for which regularization is the only means available.
It has been seen recently that San Marino, in particular, has been attempting to negotiate a TIEA with Italy. In the absence of such an agreement, estimates of the reduction in San Marino’s bank deposits as a direct consequence of the tax amnesty range from the optimistic at only 15% to the pessimistic at 40%.
On the other hand, it is reported that the Swiss government has not yet replied to the Italian proposal for a TIEA amendment to be added to the existing double taxation agreement between the two countries.
