Tax Pills

Italy’s voluntary disclosure in search of a second chance. Set by the Revenue Agency a new round of fiscal clarification and guidance. Available online an internet application to help calculate sanctions and interest due
Taxpayers who decide to remedy spontaneously the omissions and irregularities committed until September 30, 2016 on the holding of financial assets may apply to Italy’s second version of the Voluntary Disclosure Program – VDP - by 31 July 2017, while payment of the VDP and submission of the supporting documentation must be filed by 30 September 2017. With a technical note, Circular n.19/E, published today and available online at, the Revenue Agency has provided further clarification on how to access the Voluntary Disclosure introduced, in its second version, by Decree n.193/2016.
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 taxpayers may have committed in relation to the assets held abroad
Why the new Voluntary Disclosure – In this context, Circular n.19/E illustrates and clarifies the new fiscal measures applied to the second edition of the Voluntary Disclosure. Particularly, as explained by the Revenue document, the opportunity to reopen the deadlines to regularize eventual violations or omissions, was driven by the decision to offer a further chance in view of the fact that the fight against international tax evasion was going to be, as it actually happened, particularly intensified, as showed by the commitment by the Tax Authorities of more advanced economies in establishing a more and more effective and shared strategy to counter international tax frauds and evasion. Additionally, the scope of the network of agreements on the exchange of tax information has been extended, thus contributing to broadening the list of countries involved and thus allowing taxpayers, in the case of investment or financial activities managed within these States, to benefit from specific facilities provided by the Voluntary collaboration procedure.
The list of countries offering special benefits to those who adhere to the voluntary disclosure  - The regulatory changes introduced by Decree n. 193/2016 allow some benefit extensions, under the voluntary cooperation procedure, for taxpayers who hold investments or financial activities in so-called black listed States that have entered into specific information exchange agreements, pursuant to Article 26 of the OECD model or conforming to the TIEA one, which entered into force before October 24, 2016. Thereby, the above list of countries has been expanded so that to benefit from further reductions in sanctioning measures as well as the failure to apply the doubling of deadlines for the detection and rejection of violations of fiscal monitoring obligations. Guernsey, Hong Kong, Cayman Islands, Isle of Man, Cook Islands, Jersey and Gibraltar are also listed on this list as they have signed an information exchange agreement in force on 24 October 2016.This new Voluntary edition has extended the list of countries to further mitigate sanctions and non-application Of the doubling of terms for the assessment and rejection of violations of tax monitoring obligations. Guernsey, Hong Kong, Cayman Islands, Isle of Man, Cook Islands, Jersey and Gibraltar are also included in this list, which have entered into an information exchange agreement in force on 24 October 2016.
Available a definite version of the software that will help taxpayers to calculate the sums due - The parties concerned will be able to provide spontaneous payment of the sums due, taxes, penalties and interest by 30 September 2017. The Agency clarifies that it is possible to reschedule the payment in three Monthly installments of equal amount and that, in that case, payment of the first installment must be made by 30 September 2017.
In order to facilitate the calculation of the sums to be paid, the Revenue Agency has made available an application that allows taxpayers who adhere to the voluntary collaboration procedure to independently calculate the sums due to the Tax Authority. The application is available without registration on , the official Revenue Agency website, within the online tax services dedicated section. The procedure, other than to help calculate the sums due as sanctions and interest, provides the information necessary for compiling the relevant F24 payment model.
VDP, Who can participate and adhere - 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.
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.

Italian housing market: +8,6% in the first quarter 2017
Italian real estate market continues to grow: in the first quarter 2017 the housing market has increased by 8.6% over the same period in 2016, though at a more moderate pace than in the previous quarters. Good achievement for the main Italian cities: Firenze grows by 16.5%, Genova by 15%, Milano by 13.8% and Roma by 10.2%. As regards the non-residential market, offices and retail sector increase by 10.8% and the industrial one by 12.2%.
These are the most important information according the report published Monday by the Real Estate Market Observatory (OMI) of the Italian Revenue Agency - Agenzia delle Entrate.
The reports of the Real Estate Market Observatory
Starting from this year, the Real Estate Market Observatory (OMI) has published two different reports, one for the residential market and one for the non-residential one. This way, data used in the reports appear to be more accurate and detailed. In particular, these reports retrieved information from different archives managed by Agenzia delle Entrate: the cadastral database, the land registry and the real estate market observatory. The first one provides information about cadastral typologies, the second one gives the number of real estate unit sold and the third one offers information about real estate value.
Real estate units are grouped by use (housing, appurtenances, office, retail and industrial) according to the cadastral categories provided in the deeds of transfer.
Information about real estate sales cover the whole national territory, excluding four areas (Bolzano, Trento, Gorizia, and Trieste) where the cadaster and/or the land registry are managed by local administrations.
Italian housing market in the first quarter 2017
At the beginning of 2017, the total number of house sales was 122,000, 10,000 more than the same period of 2016. In particular, the highest growth rate was represented by the two main islands, Sicily and Sardinia, with a growth of 11.9%, followed by the North-East area (+9.6%) and the North-West (+9.5%). The housing market in the central region (+7.9%) and in the south one (+5.1%) is less dynamic than the rest of the Country.
Among the big cities, Firenze showed the highest growth rate in housing market (+16.5%), resulted in 1.237 transactions. Double-digit growth for Genova (+15%), Milano (+13.8%) and Roma (10.2%) too, while a lower expansion noted Torino (+4.6%), Napoli (+4.8%), Bologna (+4.4%) and  Venezia, stopped by a +2.3% growth rate. Residential market trends show no significant differences between main and secondary towns.
Surfaces of sales houses improve their rates by 9.8%: the average area of a habitation is now 105 square meters.
Appurtenances market
In the first quarter of the year, basement and attic sales were about 13,700, up of 17% than the same period of 2016. The average area of an appurtenance is of 14.5 square meters. This date is higher in the 8 main Italian cities, where the growth is over than 25%. Parking space sold was 71,605, increase by 8.7%, with an average area of 21 square meters.
Non-residential market
Good news also for the non-residential market: sales of offices, shops, commercial buildings, commercial deposits and garages grow up of 10.8%, with over 20,000 units sold. All the regions show similar rates, excluding islands, whose growth is nearly 15%, although being a relative small market. In particular, offices sales were 2,363, up to 19.2%, and shops transactions were 6,216 (up to 3.2%). Regarding sheds and industries, they increase by 12.2%, even if the growth is reduced than the three previous quarter, while buildings agricultural storage sheds sales were 582, up to 35% on the same period of 2016.
Further information, details and data references are available to the website, where you can find the Italian version of the Quarterly Report.
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