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Game changer? Switzerland will no longer be blacklisted from 2024

Game changer? Switzerland will no longer be blacklisted from 2024
As already highlighted in other Focus Alert on our website, Italy the Swiss Confederation will no longer classify Switzerland on Article 1 of the Ministerial Decree of 4 May 1999 (the so-called “Black List”). As of 1 January 2024, therefore, Italian individual transferring his/her tax residence (or maintaining their residence) in Switzerland will no longer have the effect of reversing the burden of proof, being the jurisdiction carved off from the black list non cooperative countries It will be the Italian tax authorities that will have to provide the proof, according to the well-known parameters of Article 2 of the TUIR, that the tax residence must be traced back to Italy. 

As already commented, no retroactive effect and therefore no ‘favor rei’ will apply. Ongoing and future assessments can always be based on the (Italian) assumption that Switzerland is ‘blacklisted’ until 31 December 2023. Therefore, for example, financial assets and investments held in Switzerland during 2023 in breach of the so-called “tax monitoring” obligations will continue to be presumed, unless the taxpayer proves otherwise, to have been constituted by income on which taxes due in Italy have not been paid. Similar conclusions must be drawn for the terms related to the notification of the relevant assessment and penalty notices which, for the Italian tax authorities under the current rules, are doubled if compared to non-black list jurisdictions. 

As is well known, we live in an era of (automatic) exchange of information and the utmost attention must be paid to compliance, not just tax compliance. 

Considering the novelty, which will take effect as of 1 January 2024, it is appropriate to ask ourselves if there will be a ‘structural’ change for wealth management and an increase on relocations to neighbouring Switzerland, traditionally and globally regarded as a safe country, especially in in geo-political situations such as those we are currently experiencing. 

On a similar path it would be recommendable, for those individuals and families already resident in Switzerland to check duly in order to assess to be in full compliance with the Italian Tax Authorities too. It could be a right time to eventually negotiate and comply in order to have a clear future ahead. 

Our firm has also been present in Switzerland for many years, providing professional cross border and international advice to clients, trust and fiduciary companies and financial intermediaries active in Switzerland.  

It will also be interesting to monitor legislative trends and compare them with other countries that are accelerating in their general focus on attracting high-potential HNW individuals and talents. Reference is made to UK, France, Portugal and Greece, just to remain in Europe. A segment where Italy is also playing an important game and which sees it climbing positions towards the top, confirming itself as one of the destinations of greatest interest for UNWIs and internationalised entrepreneurial families. While waiting for the Tax Reform (please refer to our previous Focus on this point) which, as already commented and anticipated, will also affect some decisive parameters regarding tax residence. 

  • Luigi Belluzzo
  • Luca Luoni
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Belluzzo International Partners is a multidisciplinary, international and independent professional boutique that provides consultancy in the areas of Wealth, Law, Tax, Finance.
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