Tax Amnesty Begins for Italians

September 17, 2009 Offshore BankingTax HavensTaxation in EUTaxation in Italy  No comments

The Italian Government has launched a tax amnesty program for the declaration of funds held in offshore accounts.

Beginning on the 15th of September, Italians will have opportunity to declare their offshore accounts to the government. The tax amnesty, which will last until the 15th of April 2010, will allow Italian nationals to protect themselves from future penalties and criminal prosecution for their undeclared assets, in turn facing only a 5% penalty on the account’s total value.

The tax amnesty applies to private individuals, partnerships and non-commercial associations. Limited liability companies and those already under investigation for tax fraud are not eligible. Those applying have two options available for their funds – repatriation and regularization. Repatriation will see the assets in question transferred to Italy and subsequently follow typical Italian laws and procedures. Regularization extends to tangible objects like art, yachts, property, along with financial assets. This option is only available to those whose offshore accounts are held within the European Economic Area, although it is envisaged that this option will eventually extend to jurisdictions which hold Tax Information Exchange Agreements with Italy.

It is hoped by the Italian government that this effort will recover approximately €4.5 billion. While the officials have made statements proclaiming high hopes for the campaign, there have been voiced concerns from its opposition who claim that the 5% levy is too lenient in comparison to similar efforts made by other European nations.

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