With the reopening of the Voluntary Disclosure program by the Italian government, it becomes particularly interesting to understand how and on what legal basis tax information can be exchanged between countries. The exchange of tax information involves three major categories of taxpayers:
(i) Italian people and entities that are tax resident in Italy and who hold assets abroad,
(ii) foreign people and entities who are tax resident in Italy but also have assets abroad, perhaps in their country of origin and
(iii) persons who do not reside in Italy but have businesses or receive income here.
The element that is common to all these taxpayers is that, on the basis of international tax cooperation agreements, information or data on these activities can be exchanged between the two countries (i.e. the tax residence of the taxpayer and the country where the asset is located or from where they obtain the income).
Among the most important international agreement in this field is the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (also known by the acronym MAAT). This agreement was signed in Strasbourg in 1988 and Italy acceded to that agreement with law no. 19 of 10 February 2005 which took effect on 1 May 2006. In 2010, the Convention underwent a make-over resulting in the taking effect of the Protocol of June 1 2011.
The people who are affected by the Convention are taxpayers who, based on their residence together with the location of their property, are resident in countries that have ratified the Convention and that hold assets or receive income in another country that has also joined the Convention. Here the status of the countries that have adhered to the convention.
From scrolling through this information, the date of entry into force for each country as well as the data that can be exchanged can be identified. Article 27, paragraph 6 of the Convention provides that the Convention takes effect for that country on January 1 of the year following its ratification of the Convention.
However, paragraph 7 of the same article provides that in the presence of tax evasion under the law of the country requesting administrative assistance, the information and assistance required from the country where the offence has occurred can also extend to tax periods preceding the entry into force of the Convention.
This broad provision may be limited under article 30 paragraph 1 letter f) of MAAT under which a subscribing country may seek to limit the period for which it undertakes to provide the information relevant to the crime by the requesting country to the three tax periods preceding the entry into force of the Convention.
Italy has not exercised this option while other countries such as Luxembourg or Switzerland have done so (here is the list of limitations ). Italy has therefore indicated its willingness to provide tax information without putting any time limits on the time period of the requests. So while Italy will provide the information requested by another State without time limits, conversely Italy will need to check if the country from which it requests tax information has opted for a time limitation referred to above.
Essentially a taxpayer will have to check on the links (which are constantly updated) if the relevant country has opted for a time limit as provided for by Article 30 and the time when the country signed and implemented the MAAT.
Finally, it is worth remembering that the main areas of collaboration that a subscribing country may obtain from another subscribing country are:
(a) tax information that is already in existence and available to the relevant local tax authority for which there is automatic exchange, upon request or spontaneously;
(b) cooperation in the enforcement of tax debts accrued in the requesting country;
(c)assistance in the service of documents.
by Stefano Mazzocchi and Roberto Viscomi
Fonte: il sole 24 ore