After the Italian Government approved the final version of the rule related to the doubling of tax years under assessment, reducing it to ordinary 4 or 5 years terms, the Italian tax payers who utilized Singapore or Singapore based structure may emerge to full compliance having the possibility to take maximum advantage from the Italian VD law.
Following the implementation of Law n. 186/2014, the issue of the Directional Provision from the Head of the Italian Revenue Service and two circular newsletter from the Italian Tax Aministration (a third one is waited in the next days) the taxpayer may enter into the procedure at his/her preference. The taxpayer enters the procedure for the tax period up to the year 2013 and it is necessary to start the procedure within September 30th, 2015. Rumors are already high in order to have a new deadline, as already occurred in the past (e.g. with the Italian Tax Amnesty (“scudo fiscale”) and we suggest anyway to take this month of August to liaise with the trusted professionals in order to prepare the procedure.
The issues recently sorted out is about the number of years to be assessed and, after the Government Bill of July 31st the doubling of tax years occurs only if a notice is received within ordinary tax terms (4 or 5 years depending on the case of untruthful or omitted tax return). This actually means that any tax crime issue related to the year before 2009 are to be considered elapsed if the taxpayer pays the VD Tax Bill.
| Ordinary TermsFor non Black List countries | Double Terms for Black List countries | Double Terms for Tax Crime rules | ||
| Direct Taxation & Other applicable taxes | Untruthful Tax Return | From 2010 | From 2006 | Non applicable if the notitia criminis transmitted after the ordinary terms of tax assessment * |
| Omitted Tax Return | From 2009 | From 2004 | Non applicable if the notitia criminis transmitted after the ordinary terms of tax assessment* | |
| RW Fiscal Monitoring | From 2009 | From 2004 | ||
| *to be read according to a transitional provision | ||||
According to the Tax Office, also on the basis of recently signed protocols for exchange of information and Tiea, the following countries will not be treated as black list: Luxembourg, Switzerland, Liechtenstein, Monaco, San Marino, Malta, Cyprus, Kuwait, Singapore, South Korea. Further news is awaited in relation to Vatican City, Jersey and Guernsey, Gibraltar, Hong Kong and Cayman.
Here is it the good news for Singapore. Circular n. 27/E of July 16th 2015 confirmed formally (§ 5.3) that Singapore is to be regarded as a cooperative countries considering the Treaty (§ 26) and therefore Singapore can be considered as a non Black List countries and taxpayers may well elect to keep their money in Singapore as far as the taxpayer, the tax Administration and the Singapore Bank sign a specific document (so called “waiver”) in order to maintain a specific exchange of information, according to the Treaty, on the specific bank account.
The Italian VD is open to any taxpayer, including formerly resident taxpayers who have moved away and foreign taxpayers in relation to territorially linked assets and income.
Law and rules specify many issues, basically following the path of the OECD procedures within the frame of the Italian (complex) Tax System. Individuals, Corporate Entities, Trusts and other SPVs may elect to get the benefit of an almost complete amnesty from crime punishment rules related to tax crimes and a strong deduction of administrative sanctions, although taxes need to be paid totally.
The procedure may involve matters such as trust structures, private insurance structures or SPVs which therefore need a good set of understanding in order to explain the tax authorities the various involved issues (not necessary tax ones) in order to re-organize the structure giving it a future of full tax compliance.
We believe that it is now time for the individuals and entity which were refrained by complexity issues to consider to start the Italian Voluntary Disclosure procedure, which necessarily sets the preference for a mandate to be given to an Italian Professional who will gather and analyze all relevant information in order to present the taxpayer to the relevant Tax Authorities and manage a soft landing within the Italian Tax Compliance.
In fact the procedure sets the necessity to send a Model to the Regional Tax Authorities, following which the taxpayer is placed under the shield of the procedure and any future tax audit from the Italian Tax Office or the Italian Tax Police will not harm the procedure.
It is relevant to remember that there is a extraordinary facility, although not a cheap one, to assess the past tax and tax crime issues without entering for the future in the new crime of self-money-laundering with its heavy penalty sets including imprisonment.
For further information you may browse our B&P Focus Magazine or e mail our Firm.
