Tax Pills

International Tax Cooperation, the Italian Revenue Agency hosts the Joint Audit Conference
Joint audits and synergies among Countries to enhance tax certainty have been at the heart of the international debate that has taken place today in Rome at the “Joint Audit Conference”. The event, organized by the Italian Revenue Agency, the Ministry of Finance of Bavaria and the Universities of Bologna and Heidelberg, has focused on recent developments on international tax cooperation and on cross-border audits jointly conducted by two or more Tax Administrations on groups operating in various Countries.
The Italian Revenue Agency and the Bavarian Ministry of Finance are involved in a Joint Audit Project, effectively working together to ensure compliance with tax rules by companies operating in multiple jurisdictions.
Bringing together representatives of Tax Administrations, International Organisations, Academia and Business, the Conference has been a chance to share the outcomes of the Joint Audit Project and to discuss the evolution of the relationships between Tax Administrations and taxpayers. Ernesto Maria Ruffini, Director General of Italian Revenue Agency, and Fabrizia Lapecorella, Director General of Finance Department (Ministry of Economy and Finance) opened the Conference. International speakers, such as Ekkehart Reimer of Heidelberg University, Achim Pross from Oecd, Tom Neale, representing European Commission and Francesca Mariotti of Confindustria, took part in the event.
Representatives of some foreign Tax Administrations also attended the Conference, such as Thomas Eisgruber and Eva Oertel from Bavarian Ministry of Finance, Egil Martinsen from Norwegian Tax Administration and Hans Rijsbergen from Dutch Tax Administration. Raffaele Russo, Senior Advisor to the Minister of Economy and Finance, moderated the discussion panel.
Joint Audit in a nutshell – The Joint Audit represents an innovative control tool within the framework of international tax cooperation. In particular, it is a tax audit jointly carried out by two or more Countries on groups of related companies with cross-border activities. Joint Audits are performed by auditors from Revenue bodies of each Country with common or complementary interest, together with tax officers dealing with exchange of information.
Italy-Bavaria, an innovative experience - Cooperation between Italy and Bavaria started in 2012 with the aim of jointly conducting tax controls on cross-border transactions between companies operating in the two territories. Nowadays this activity is performed on the basis of the Memorandum of Understanding signed in July 2016 by the Italian Revenue Agency and the Bavarian Ministry of Finance. The two Tax Administrations work together, also through shared offices placed in Munich and Milan, in order to increase the effectiveness and efficiency of tax controls and to lighten taxpayer administrative burdens, also by enhancing transparency and tax certainty. One of the main goal is also to decrease international disputes, thus reducing the number of MAP procedure or making the MAP related process faster. From an academic point of view, Universities of Bologna and Heidelberg finalized a research project on Joint Audit legal framework with reference both to the domestic, Italian and German, and international context.

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Begins the new fiscal era marked by the adoption of Synthetic Reliability Indexes. Italy’s Revenue Agency has already identified the first 70 economic activities to associate with SRIs
The Revenue Agency has tailored the first 70 new “fiscal report cards”, or Synthetic Reliability Indexes (SRIs), to replace an equivalent number of preexistent “studi di settore” applied to 1.4 million taxpayers. The new fiscal indexes will be in force in 2018. Particularly, the ad hoc provision, signed by the new Head of the Revenue Agency, Ernesto Maria Ruffini, categorizes and selects the first cluster of 70 indexes to be elaborated this year and which may already be applied starting from the 2017 tax period following a direct approval by the Ministry of Economy and Finance, while the remaining indexes (SRIs) will be identified by January 2018 and subsequently elaborated over the year, till to involve, on a regular basis, about 4 million economic operators representing the entire spectrum of taxpayers involved in the surpassed “sector studies”.
How the new fiscal report cards work - From 2018, businesses and professionals will thus have a clear view of the correctness of their tax behaviors through a new statistical and economic methodology that will establish the degree (on a scale 1 to 10) of effective and verifiable reliability to comply with tax obligations.
The taxpayers’ audience of the new Indexes, over one million - The new 70 Indexes will involve about 1.4 million taxpayers. In particular, 29 synthetic reliability indices will be developed for the trade sector. Among the activities included are retail stores in non-specialized computers’ shops, peripherals, telecommunications equipment, audio and video consumables, home appliances, sports goods, games and wholesale of furniture. Instead, 17 Indexes have been identified for the services sector, including carpenters and mechanics, hairdressers and barbers, repairing motor vehicles, motorcycles and mopeds, as well as real estate brokers, catering and tourist villages. For the manufactures the Indexes identified are 15 and concern, among others, the manufacture of travel articles, handbags, manufacture, processing and processing of glass, footwear, rubber products. For professionals, the new SRIs cover 9 different self-employment activities, including graphic designers, geometry and law firms.
The largest number of makers for macro-categories - By going through the activities of about 1.4 million taxpayers affected by the new Indexes for the 2017 tax period, which will then be able to access the expected benefits, some 168,000 are trading intermediaries (12% of the audience), nearly 145,000 attorneys (10%), over 129,000 plant installers (9%). Among the largest categories of makers affected by SRIs are restaurants, about 95,000 (7%) and hairdressers, about 74,000 (5%).
The benefits for taxpayers - Taxpayers who will be "reliable" applying the new Indexes will have access to significant fiscal rewarding benefits on multiple levels. Particularly, the exclusion of analytical-presumptive investigations and a limited application of the findings based on the synthetic determination of income. It is also envisaged that the deadline for the assessment and exemption will be reduced, within the limits set, by the issue of the compliance visa for the compensation of tax credits. A new methodology is also introduced for the clusters identification which will contemplates, in details, the reduction of number, a more stability over time and a more solid assignment of the taxpayers to the corresponding cluster. Questionnaires will be also simplify, through the reduction of the information requested. And finally, the estimation of revenues and value added per worker will be made through the utilization of a production function of the Cobb-Douglas type, in logarithmic form, which means a better economic interpretation of the estimated coefficients, elasticity, and results that are closer to the economic reality.
A more effective tool to promote compliance in Italy – In perspective, the synthetic indexes of reliability will promote compliance of the most virtuous taxpayers and will enable a better fight against those non-virtuous behaviors that distort the rules of competition and markets, while improving economic efficiency and tax system’s neutrality in accordance with the recommendations of the main international Institutions, above all, OECD and IMF.
“Studi di Settore” and new synthetic indexes of reliability comparing, or the old and the new compliance model face to face - Whilst the previous SdS system was based upon an estimation of an “adequate” level of revenues and on the consequent possibility for the Italian Tax Administration to perform presumptive controls, the new system takes into account multiple elementary indicators, which regard not only the declared revenues, but also indicators of “reliability” and “anomaly” for a given economic activity. Most important, the new system allows the most reliable taxpayers to access a reward system, which implies several advantages such as shorter deadlines for controls, exclusion from some tax controls and faster procedures for VAT reimbursements. To be clearer, the new approach intends to replace “repression” in favor of a rewarding logic based on cooperation between the Tax Administration and the taxpayers.
The aims of the new SIRs - In short, the SIR Project is aimed at allowing taxpayers to know their degree of reliability as determined by the Tax Administration. With the goal of reaching tax compliance, taxpayers can also improve or adjust their declaration. They also provide, in case of a high reliability level of the synthetic index, a diversified reward mechanism, in order to ensure a clearer and better relation between the taxpayers and the Tax Administration.

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