Tax Pills

Italy recovered over 20 billion record tax evasion revenue in 2017
The Revenue Agency and the Revenue Agency-Collection have matched encouraging results last year, both about controls and services for citizens.
The fight against tax evasion in Italy generated a record 20.1 billion euros for the State finance-coffer in 2017, signing an increase of 5.8% with respect to 2016. Particularly, the head of Italy's Revenue Agency, Director General Ernesto Maria Ruffini, illustrated the results achieved in 2017 stressing, in particular, how the “facilitated definition” scheme elaborated to make it easier for people to pay off tax disputes generated a total of 6.5 billion euros in the same period.

Not just new fiscal rules and tools, but also the human capital at the core of this new record achievement - The Director General has also highlighted the work performed by the employees of the two bodies of the Agency as well as the importance of the simplification measures implemented in recent years under the banner of a new way of understanding the relationship between the Financial Administration and citizens. As regard to this point, he stressed the fundamental role played by the Taxpayers' Rights Charter, as a real orientation tool for all those involved every day in the various administrative activities related to tax matters.

The Revenue Agency and the Revenue Agency-Collection pro-active synergy - The Director also recalled the increasingly strong synergies between put in place by the two bodies, the Revenue Agency and the Revenue Agency-Collection, and the constant and close collaboration fostered with the MEF and the Guardia di Finanza, or Tax Police.

The Agency’s new strategy to enhance tax compliance - Simplification, loyalty and respect for “citizens-payers” or, put better, for “clients”, are the underlying coordinates of the activity performed by both the Revenue Agency and the Revenue-Collection Agency. In other words, the Financial Administration must be a reliable ally able to stand on the country time-zone and, at the same time, always to be at the service of its citizens.

A look at the data, not just tax checks but also compliance - Control and compliance promotion activity carried out by the Revenue Agency in 2017 has allowed the reporting of over 20 billion euro in the State coffers, with an overall increase of 5.8% compared to 2016. In detail: 11 billion derive from direct payments by taxpayers following controls (+ 14.6%); 7.4 billion derive from the payment of tax debts, also called “ruoli” (+ 54.2%); 1.3 billion is the sum collected thanks to the compliance letters sent to taxpayers (+ 160%); 400 million have been recovered thanks to the first version of the voluntary disclosure. Is also important to stretched that as regards to tax litigations the number of appeals to the Provincial Tax Commissions has continued to decline to 70 thousand in 2017 (-15% compared to 2016).

New tax measures as an easy vehicle to invest in Italy - Another sector in which the Agency was significantly committed looks at the application of the tools introduced by the legislator to encourage investments in our country. In particular, were 431 the agreements concluded under the preferential taxation system for income deriving from the use of certain intangible assets, also called the Patent Box law. In the same period, the call for new investments led to the signing of 25 agreements, with significant employment effects, while the co-operative compliance, or the collaborative compliance regime, has registered the adhesion of 10 large entrepreneurial companies each with a turnover exceeding 10 billion euro.

Here are the results on the services provided in 2017 by the Revenue Agency - Also in terms of services delivered to citizens and businesses, very positive results were achieved in 2017, especially with regard those run online. The following data are some of the most significant results matched: on leases: 63% of registrations were made electronically through the credentials (pin and password) issued by the Agency; as for as land registry services are concerned, 92% of consultations on databases have gone through the web; on the precompiled tax return, 2.4 million taxpayers pre-filled 730 tax form were sent online directly by citizens; for the tax drawer, the number of total visits reached the number of 27 million, which means the consultations carried out increased up to + 17% compared to 2016; on the website access data has been registered 133 million visits; 38 thousand total alerts were sent via SMS; on Agency’s facebook channel , were about 8 thousand the users who received assistance through it; the electronic invoicing new regime managed 30.2 million PA invoices and 111 thousand bills related to B2B transactions.

On the Revenue Agency-Collection - Excellent results were also achieved by the new public economic entity in charge of collection, which since last year replaced Equitalia: the sum collected amounted to € 12.7 billion in 2017 (+ 44% compared to 2016): 7 billion on behalf of the Revenue Agency; € 3.7 billion on behalf of Inps and Inail; € 0.8 billion on behalf of the Municipalities; € 0.8 billion on behalf of Regions, Pension funds and Chambers of commerce; € 0.4 billion on behalf of ministries, prefectures, other agencies. Ordinary collection reached € 6.2 billion, which means € 800 million more than forecast (+ 14.8%). Remarkable also the contribution offered by the collection through the application of the so-called  “facilitated definition” scheme: 6.5 billion euros. There were 1.5 million taxpayers who applied to join the program, while there are 6.3 million folders and notices that were then subject to payment of installments. Particularly, 66% of applications for accession to the facilitated definition were presented by taxpayers using the online channels (website, email or certified e-mail), 32% turned to the branch network and the remaining 2% preferred traditional channels such as, for example, registered mail or regular mail.

Revenue Agency-Collection services – The Revenue-Collection Agency records important results also on the side of traditional and digital services: branches - 4.9 million citizens served (down more than 100 thousand compared to 2016, confirming the constant preference for online services); internet site - 10.8 million accesses (+2.8 million compared to 2016); Equiclick app - downloaded by 63 thousand users; SMS alert - If I forget - 145 thousand users who have joined; Equipay - the innovative service with which you can check your debit position using the ATM in the ATMs enabled, has been used by more than 3 thousand citizens; size code - the smart "codometers" have been installed at all branches of the Revenue-Collection Agency, thanks to which it is possible to better manage the inflow at the counters, shortening the time required to provide the service; e-ticketing - by next spring a new service will be activated that will allow you to book a ticket to go to one of the branches on the chosen day, avoiding waiting times and guaranteeing a specific and better service.

Italy’s CbC reporting: set out the last administrative framework for the automatic exchange of information
The Revenue Agency issued the final rules for multinational groups with revenues exciding €750 million. From now on, Italian parent companies will have until December 31, 2017 to transmit all data relating to 2016 tax year, in line with the requirements of the 2015 EU Directive

The Italian Revenue Agency has recently published the final instructions for Italian-based multinational companies required to communicate the data of subsidiaries, as part of the automatic exchange of information on tax matters, also known as country by country reporting or CbC reporting.
How the CbC reporting works and its procedural background - Particularly, in the case of groups of multinational companies with a consolidated financial statements that report total revenues of at least € 750 million, the parent companies resident in Italy must disclose the 2016 data by the December 31, 2017 deadline. In brief, this ad hoc measure, signed by the Director of the Revenue Agency, Ernesto Maria Ruffini, in fixing the deadline for the transmission of data and providing further indications, is the final step of a long implementation process. In fact, originally was the Finance Act of 2015 to introduce firstly into Italian law the CbC report requirements based on the Action 13 of the Oecd Base Erosion and Profit Shifting (Beps) Project and to provide a framework for their effective implementation.  Then it was the turn of the Decree of February 23, 2017 through which the Italian Ministry of Economy and Finance implemented the EU Directive 2016/881 dated May 25, 2016 setting out the procedures to be applied to meet country-by-country (CbC) reporting requirements in Italy and also establishing January 1, 2016 as the relevant date for its application.
The various entities that may be required to file a CbC report in Italy -  First of all, all Italian entities need to assess if their MNE Group falls within the CbC reporting regime, as said before in the case the consolidated group revenue exceeds Euro 750 million, and if so, they also have to determine which entity will be the Reporting Entity. That said, various entities can cover this particular and strategic role. To begin, the Ultimate Parent Entity of an Italian-based MNE Group with consolidated revenue of Euro 750 million or more or, under certain conditions, an Italian entity required to make a local or secondary filing as a Constituent Entity because the jurisdiction of its Ultimate Parent Entity does not require CbC reporting or does not have an appropriate competent authority agreement with Italy to permit information exchange. Yet, the Reporting Entity can be also a “surrogate parent entity”, in brief an entity other than the Ultimate Parent Entity (UPE) that will file the CbC report in its jurisdiction of tax residence as the sole substitute of the UPE and on behalf of the entire MNE group. Finally, the UPE role can also be performed by an EU designated entity, resident in Italy, appointed to file a CbC report in its tax jurisdiction in order to satisfy the requirement for secondary filing on behalf of all EU entities.
First submission by 31 December 2017 - For multinational groups with a reporting tax period starting on 1 January 2016 or later and ending before 31 December 2016, the communication must be made by 31 December 2017. The CbC report deadline will be within 12 months of the end of the relevant fiscal reporting period. The information must be transmitted through the telematics services of the Revenue Agency.
Information to be reported - Multinational companies must disclose information concerning:
• the tax jurisdictions in which the entities belonging to the group of multinational companies are resident for tax purposes or, in the case of permanent establishments, where the latter are located;
• revenues (consisting of the sum of the revenues of all the entities belonging to the group of multinational companies);
• profits (or losses) included gross income taxes (consisting of the "Result before taxes") of all the entities belonging to the group;
• the income taxes paid during the tax period by all the entities belonging to the group;
• current taxes accrued on the taxable profit or loss for the year to which the reporting of all the entities belonging to the group refers;
• the declared capital, given by the sum of the share capital and capital reserves of all the entities belonging to the group;
• profits not distributed;
• the number of employees;
• tangible fixed assets.
The data flow speak two languages ​​- According to the last provision published recently, multinationals operating in Italy will have to submit the documentation both in Italian and in English for the subsequent exchange of information with the other jurisdictions, in line with the provisions of 2016/1963 fixed by the European Commission.
Penalty regime – A penalty regime was introduced in the 2016 Finance Act and remains unchanged. Failure to file a CbC report or disclosure of incomplete or inaccurate information will entail penalties from Euro 10.000 to Euro 50.000.

FiscoOggi è una pubblicazione dell'Agenzia delle Entrate - Ufficio Comunicazione
Testata registrata al Tribunale di Roma il 19.9.2001 con n. 405/2001
Direttore responsabile Claudio Borgnino