Voluntary Disclosure in Italy

Italian taxpayers have time until September 2015 to regularize their tax situation using Voluntary Disclosure Law (LAW 15th December 2014, n. 186).

Procedure

Any taxpayer entering the Voluntary Disclosure Program (VDP)  will have to reimburse to the State the taxes due as if the income had been declared ordinarily. Depending on the type of income and the fiscal year, the tax rate will either be 12.5%, 20%, 27%, or 43%. Interest will also be due on tax arrears but penalties will be minimized. Penalties will range between 12.5% and 20% of the unpaid taxes. Taxes and penalties must be paid for 4 years in case of tax evasion (i.e. the account was not included in the yearly tax declaration) or for 5 years in case no taxes had ever been declared. Moreover, a penalty for not having completed Form RW (Foreign Accounts Report) is due. This amounts to 0.5% for white-listed countries for 5 years or up to 1% for black-listed countries for 10 years.

Calculation

The taxpayer will have the right to opt for a flat-rate payment of taxes as long as the average amount does not exceed EUR 2 million. In that case, income will be calculated at 5% per year, of which 27% will be charged (1.35% annually). However, inflows will be taxed at the 43% rate and outflows could also be object of a 43% taxation in some cases. Penalties and RW sanction are the same as described in the procedure upon.

Amnesty

Any person cooperating voluntarily will be exempted from punishment for 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 amnesty applies to individuals as well as entities.

Author: EMILIO MENEGHELLA
download https://it.linkedin.com/in/emilio-meneghella-53b6348

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