Tax Pills

The Revenue Agency and Ministry of Economy and Finance take stock of 2016
Third consecutive record year for the Italian Revenue Agency, with 19 billion reported in the State coffers in 2016. It is the highest amount ever collected by the Tax Administration, thanks to targeted tax assessment activities and to a new strategy aimed at increasing the implementation of spontaneous tax obligations. In fact, about 500 million euro come from the promotion of preventive dialogue with citizens, aimed at giving taxpayers the opportunity to correct the mistakes in time, and thus to pay reduced penalties, avoiding future tax assessments.
Good news also in terms of tax refunds: in 2016 the offices of the Revenue Agency delivered  2 million and 740 thousand tax refunds to business and families, for a total amount of 14 billion euro.
Meanwhile, it is growing the use of online services, with over 6 million registered users, and the number of prefilled annual tax returns handled independently by the citizens, with 2.1 million returns sent via web by taxpayers.
These are just some of the results, achieved by the Italian Revenue Agency, presented on 9th February 2017 by the Director, Rossella Orlandi, during a press conference at the Ministry of Economy and Finance, with the presence of the Minister, Pier Carlo Padoan, the Deputy Minister, Luigi Casero, and representatives of tax authorities.
Recovered 19 billion euro from the fight against tax evasion -  After the success of the previous two years (14.2 billion euro in 2014 and 14.9 billion euro in 2015), 2016 confirms the positive trend in terms of amounts collected, thanks to a targeted fight against tax evasion with more than 19 billion euro recovered (+ 28%). Of these, 4.1 billion are attributable to the “voluntary disclosure” procedure. A result that goes beyond expectations, thanks to painstaking assessment activities carried out by the tax officials on more than 129 thousand applications. The Revenue Agency has focused its assessment activities on large taxpayers, with a percentage of controls of 40.3%, followed by medium-sized enterprises, with 15.3% and small businesses and self-employed with 1.4%. About individuals, tax investigations were carried out in relation to more than 280 thousand taxpayers.
A 2016 of innovation and efficiency for taxpayers – The prefilled annual tax return is more and more appreciated by taxpayers that, in 2016, sent 2.1 million returns directly online, an increase of 50% compared to 2015. A success reached also thanks to the new data made available by the Revenue Agency, such as  health expenditures and other deductible expenses. The Tax Administration has also been engaged in increasing the dialogue with taxpayers, providing over 13 million services: over 10 million directly at the local offices and more than two million by phone.
994mila queries were managed by Civis, the online service to help taxpayers with the irregularity communications. Using online channels was also crucial to streamline bureaucratic procedures: last year, for example, over 1 million of leases registrations, the
61% of the total, were carried out electronically (they were 11% in 2010).
Furthermore, the Revenue Agency was also involved in other processes of innovation in Public Administration, such as electronic invoicing. Since the service started, in June 2014, the invoices exchanged electronically with Public Administrations have reached 56 million.
Finally, good news also regarding the brand new “Advance tax ruling on new investments”, that enables resident and non-resident investors, going to realize long-lasting and relevant investments within the Italian territory, to obtain the preventive opinion from the Italian Revenue Agency about the tax treatment applicable to business plans and related extraordinary operations. In 2016, 16 investors presented the investment plan to the Revenue Agency and express interest for the new institute. 6 are the instances already submitted (3 of which related to foreign investors), for a total value of 3.87 billion euro and employment implications for about 75,000 job positions.
Italy’s Voluntary Disclosure second version is again effective at works. New applications at the start on February 7
Italy has reopened its new voluntary disclosure (“VD”) program. Specific and personalized applications for joining the initiative, in fact, will begin to be transmitted to the Revenue Agency as of February 7, while the VD reports, the supporting documentation and the taxpayer-calculated payment must be filed by 30 September 2017.
Who can participate: the various panel of taxpayers interested in the tax measure - The VD new program is mainly addressed to taxpayers who:
•on or prior to 30 September 2016, were resident, for tax purposes, in Italy and did not comply with the Italian exchange control regulations;
•have not already benefited from the VD program's first edition;
•have not already had formal knowledge of the commencement of any actions by the tax administration leading to a possible tax assessment (such as an on-site audit, request for documents or information, etc.) or the commencement of a criminal procedure for violations of tax provisions connected to the subject of the disclosure.
What is the voluntary disclosure program and what the benefits for taxpayers who choose to join it - The VD program will enable taxpayers who chose to come forward and declare wealth held outside of Italy in violation of Italian exchange control regulations, to get substantial concessions over either potential fiscal penalties or from prosecution for the main tax and money-laundering crimes the taxpayers may have committed in relation to the assets held abroad.
Please take in mind, the VD is not a tax amnesty measure, in fact it has a cost to be paid by the taxpayers who adhere - Clearly, on the other side, to the participants in the program will be required a full disclosure of their identity and of all their assets and investments abroad as well as the payment of the full amount of previously unpaid taxes and related interest. Finally, taxpayers are not allowed to file more than one voluntary disclosure request.
What about cash – Moreover, the new VD program involves the disclosure of cash or other bearer instruments not held with a financial intermediary and irrespective of whether such types of assets have been located within or outside the Italian territory. Indeed, in such case the effectiveness of the VD program is subject to:
  • a self-declaration by the taxpayers in which he/she states that such assets do not originate from crimes which are not among those crimes whose penalty is excluded by the VD;
  • the presence of a notary public at the time of opening of the safe box, if the assets are stored in a safe box;
  • such assets are transferred to an authorized intermediary and kept in an escrow account until the VD procedure is finalized.
The new role of Italy’s Revenue Agency – In this VD new version, the Italian Revenue Agency will only intervene in exceptional circumstances. Namely in case of any mistakes regarding the assessment of the amount due. In particular, the Agency will have the powers to address any faults in the use of the VD procedure up until December 31st, 2018. In case of mistakes, taxpayers will be subject to severe sanctions.
What makes the new VD attractive or the changing international fiscal scenario - The success of the previous VD was based on the offer of regularizing assets held abroad before the introduction of the automatic exchange of information between Italy and some financial havens, such as Switzerland and Monaco (as well as FATCA and CRS). Another incentive was the introduction of a new criminal offence for 'self-laundering', in other words, any attempt by those using the voluntary disclosure process to disguise the origins of undeclared funds or goods. The incentives remain the same, except for those who are holding undisclosed assets in the countries that have already agreed to automatically exchange information from 1st January 2017. These taxpayers will have to remit all taxes that would have been payable on undisclosed assets, but with much reduced administrative penalties.
The international context and the demise of banking secrecy or how the voluntary disclosure arises from the change in the international scenario - The worldwide financial crisis has affected not only businesses and families over the last fifteen years, but above all sovereign debt, forcing countries to adopt a global, coordinated approach to combatting domestic fiscal crime and plan to recover large amounts of taxes which have been evaded over the years.
Oecd leading role in pave the way for a more strictly anti-evasion world - The driving force behind the change in international fiscal matters, which, as a knock-on effect saw the demise of banking secrecy, was OECD, the Paris organization which is constantly at the forefront of pushing for improvement and ensuring inter-government cooperation in order to combat international tax elusion and tax evasion. OECD, in collaboration with the G20 countries and the EU, drew up the new multilateral Standard Form, inspired by the bilateral regulations contained in FATCA (Foreign Account Tax Compliance Act), promoted by the United States of America and aimed at favoring an automatic exchange of information between non-US financial intermediates and the Internal Revenue Services on finances held by US Persons, which was already operating in Italy. The new multilateral Standard Form aimed to automatically exchange information (also known as the CRS – Common Reporting Standard) that financial authorities were obliged to provide foreign financial authorities for the countries in which their clients were resident. At present 101 countries have undertaken to adhere to the automatic exchange of information pursuant to the Common Reporting Standard; 54 of the same (the so-called early adopters), including Italy, have also undertaken to implement the new standard as of 2017, using financial year 2016 as the first year of reference – while the other 47 – including Switzerland, The United Arab Emirates, Monaco and The Bahamas shall commence said exchange in 2018 for the 2017 financial year.

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