Are you clear about your tax position in Italy?
In February I wrote about the Voluntary Disclosure program in Italy and now that program is drawing to a close.
However, I feel that many people are only just realising the full impact of what’s expected of them by Italian tax authorities. Many enquiries have arrived ‘kind-of late’ in the program’s timeframe.
The program was scheduled to end on the 30th of September, however some key legal amendments affecting the framework of the program were only completed in August/September, and given the complaints by overburdened tax and audit firms being so busy filing documentation, the program was extended to end of November.
Initial government estimates suggest that more than 10,000 applications have been filed with taxes and penalties of approximately €3.8 billion raised. Although this is far below the original hopes, the success of the Voluntary Disclosure program seems to be assured.
It’s important to note that for non-disclosure of foreign assets just related to the 2014 tax year, you can decide to utilise the voluntary settlement approach (so called “ravvedimento operoso,”) which allows you to file the RW Form for foreign assets 90 days later than the 2014 tax return deadline and just pay a penalty amounting to €258.
If you haven’t availed yourself of the Voluntary Disclosure program related to past years, then the system reverts to pre-Voluntary Disclosure, and you should chat with your commercialista about how to present your situation to authorities regarding any outstanding taxes and penalties related to previous years of non-disclosure.
What is a tax-effective structure for your current and future investments or assets?
Anything that allows you to legally reduce the total amount of taxes you would otherwise pay, by declaring in your annual tax lodgement all of your income plus local and foreign assets and investments, is potentially a tax effective structure. Italy is quite strict these days on foreign-held assets, especially where it may appear they are constructed to solely reduce tax. However they do approve and regulate authentic investment funds managed in a collective way, especially by EU-compliant money managers who report to Italy about their operations and their Italian business.
If you would like to know more, and want to start thinking about setting up your finances and investments to be more tax effective, within the law and have guaranteed peace of mind in the process, then contact me for a “no-obligation” consultation.