Voluntary Disclosure in Italy Private Clients Tax

Private Clients
Tax
Voluntary Disclosure in Italy
After the adoption of the Automatic Exchange
of Information, Italian taxpayers will only have
until 2016 to regularize their assets.
On July 21, 2014, the Organization for Economic
Cooperation and Development in Europe (OECD) published
the Standard for the Automatic Exchange of Information in
tax matters. According to this standard, all countries of the
world are called upon to adopt procedures to carry out an
automatic exchange of banking information. An initial group
of 51 countries, including Italy, has joined this exchange, to
start in 2016. Any Italian tax entity that has foreign accounts
(not only in Switzerland) will therefore have to deal with
this procedure. Switzerland announced that it will transmit
information for 2017 in 2018.
Italian taxpayers thus have two years to regularize their tax
situation. They will have this option thanks to the Legislative
Decree on provisions concerning emergence and return of
funds held abroad as well as to the strengthening of the fight
against tax evasion (better known as Voluntary Disclosure,
VD). In return for VD, Italy will introduce the crime of “selflaundering” into its national law, which upon expiration of of
the VD will make the tax position of non-complying taxpayers
very complicated and risky.
were never increased, the cost of penalties will average 1%
for each year in addition to taxes due, depending on the type
of income.
2. Simplified calculation
The Taxpayer will have the right to opt for a flat-rate payment
of taxes so long as the average amount does not exceed the
amount of € 2 million at December 31 of each year. In that case,
income will be calculated at 5% per year, at the rate of 27%
(1.35% annually), as well as reduced fines (1% for each year).
3. Tax agreement between Italy and Switzerland
According to Italian law, the doubling of penalties and time of
assessment for income tax are eliminated if, within 60 days
after the enactment of the law, Switzerland (a blacklisted
state for Italy) enters into an agreement to permit the
effective exchange of information under Article 26 of the
Model of the OECD Convention against Double Taxation. In
that case, taxes and penalties will be calculated over 5 years.
These are the main pieces of the coming legislation:
4. Exclusion of criminal offenses
Any person providing voluntary cooperation will
enjoy exemption from punishment for the crimes of
misrepresentation, failure to declare, non-payment of
certified withholding tax, and non-payment of VAT, as well as
any crimes of fraudulent misrepresentation using invoices or
nonexistent transactions or other mechanisms. This exclusion
applies to individuals as well as entities.
1. Ordinary procedure
For anyone adhering to the VD will have to reimburse to
the State the taxes due as if the income had been declared
ordinarily. Default interest shall also be due and penalties
minimized. For example, with assets of EUR 3 million which
5. The practices of Revenue
Pending adoption of Voluntary Disclosure, Italian Inland
Revenue has already dealt with several cases of emergence
of capital held abroad. It is therefore possible to take this
route even in the absence of a legal text.
Voluntary Disclosure in Italy / Tax / November 2014
Voluntary Disclosure in Italy
KPMG has developed a pragmatic approach to protect the
confidentiality of ours clients during Voluntary Disclosure
procedures. Our approach involves performing procedures
in two phases: the first in Switzerland – inventory of assets,
reconstruction of their origin, and calculation of taxes and
penalties – and the second in Italy – Italy Inland Revenue
processing, definition of arrangements for payment of taxes
and penalties.
Voluntary Disclosure in Italy
Swiss bank
Switzerland
Client
• Inventory of
assets
• Estimate
- Income
- Taxes
Italy
• Case for
voluntary
disclosure
Revenue Agency
• Presentation of
case for voluntary
disclosure
• Definition of
investigation into
income, taxes and
fine
✗
Grafik2_Selbstanzeige-Italien_EN_290714.indd 1
29.07.2014 16:43:21
Our work is paid at an hourly rate and not a percentage.
The fees vary from case to case, depending on the number
of transactions and the complexity of transactions that
the client has carried out during the period under review.
Our fees may vary depending on the completeness of the
documents the bank provides. If the documentation does
not provide the information requested, the time required for
our work could be longer.
Indicative fees range from CHF 10,000 (EUR 8,200) for case
A to CHF 110,000 (USD 90,000) for case D, and cannot be
quantified for case E, the average hourly rate for which may
be greater if the case turns out to be particularly complex.
Again, each case has its own peculiarities, and fees will vary
depending on the individual situation.
Please note that the possible involvement of a criminal
lawyer in Italy is not included in our fee.
Fees are stated net of expenses (3.5% for Switzerland, 5%
for Italy) and VAT if due (8% for Switzerland, 22% in Italy) and
net a 4% social security contribution due in Italy.
To provide a better understanding of the costs of the
procedure, we have developed a guide to the fees for the
following cases:
Case
Description
A
Flat-rate calculation
B
Limited number of annual investments (about 10) and a maximum of
5 deposits/transfers during the reporting period, on a consolidated
basis. No other assets (property, boat, gold, etc.).
C
Usual number of annual investments (about 30) and a maximum of
10 deposits/transfers during the reporting period, on a consolidated
basis. Limited number.
D
High number of annual investments and deposits/transfers
originating from business activity. Use of external investment
structures. Presence of other assets.
E
Case D but with additional elements of greater complexity.
Contact us
KPMG
Via Balestra 33
6900 Lugano
KPMG
Via Balestra 33
6900 Lugano
KPMG
Via Vittor Pisani 27
IT-20124 Milano
Lars Schlichting
Legal
Partner
T: +41 58 249 32 53
E: [email protected]
Olivier Schmid
Tax consultancy
Senior Manager
T: +41 58 249 32 50
E: [email protected]
Antonio Deidda
Tax consultancy
Partner
T: +39 02 676 44 762
E: adeid[email protected]
www.kpmg.ch/voluntary-disclosures
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely
information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without
appropriate professional advice after a thorough examination of the particular situation.
© 2014 KPMG Holding AG/SA, a Swiss corporation, is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity.
All rights reserved. Printed in Switzerland. The KPMG name and logo are registered trademarks.