Effect on non-residents of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters

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

Voluntary disclosure provisions extended to foreigners with tax residence in Italy

Voluntary disclosure provisions extended to foreigners with tax residence in Italy

Italian tax residents who have assets outside Italy that have not been reported for tax purposes in previous tax years now have a second chance to regularize their tax position in relation to those assets under the extension of the previous deadline for voluntary disclosure from 24 October 2016 (Decree Law no. 193/2016).

This also applies to any income arising from them as well as income which may have been concealed from the Italian tax authorities through financial movements abroad.

The voluntary disclosure provisions apply to those people who despite not having Italian citizenship have, now or in the past, their tax residence in Italy. Italian tax residence is determined under article 2 of the Consolidated Tax Code (TUIR). It applies when, for the majority of the tax period, the taxpayer is: a) enrolled in the register of the resident population or, b) has residency in Italy as set out in the civil code or c) domiciled in Italy. In these cases, the taxpayer is regarded as tax resident in Italy with the obligation to declare assets held abroad or in the country of origin or provenance to the Italian tax authorities.

It should be noted that, in the case of voluntary disclosure, it is essential to check the residency status of the taxpayer both in the past (that is, the tax years when he or she failed to properly disclose) and at present (i.e at the time of the presentation of the voluntary disclosure).

This step is important because it will determine whether the person needs to submit a full (voluntary international declaration that may include the voluntary national declaration) or partial (national voluntary declaration only) declaration. The international voluntary declaration regularizes both assets and the income earned abroad as well as income earned in Italy, while the national declaration only regularizes Italian income.

If a natural person has dual citizenship this also inevitably impacts on the issue of voluntary disclosure. In Italy dual citizenship is acquired in a number of different ways namely through birth to, adoption by or marriage to an Italian citizen. Foreigners can also become Italian citizens if they reside in Italy for at least 10 years and have sufficient income to ensure their economic self-sufficiency. Obviously dual citizenship can also be acquired by Italian citizens on the basis of the rules of the granting country. However, dual citizenship is not always conclusive of tax residency in Italy or abroad (think, for example, of the “resident but not domicilied” category).

In general, in cases of doubt, or when the position on tax residence is not clear, it is necessary to approach the problem step by step. From a national point of view, Ministerial Circular no. 304 of 12 February 1997 is a starting point. The Ministry’s approach is more pragmatic and informal than the checks for foreign nationals or non-residents of their tax residence. So much so that with respect to the first criterion listed in article 2 of the Consolidated Tax Code (listing in the resident’s register), it expressly provides that registration with the AIRE “does not determine domicile or residence in Italy.”

The above-mentioned circular, in relation to non-residents, confirms in fact, that “establishing domicile or residency in Italy is sufficient for the integration of the tax residence.” The Circular, therefore, defines residency (second element of article 2 of the Consolidated Tax Code) as the place where the person has his or her domicile (dimora): domicile means the place where the taxpayer decides to live and, in general, shows conclusive evidence of their wish to live there.

This means that the tax residency is not necessarily lost “for short or prolonged absences due to the particular demands of modern life (study, work, health or leisure)” as clearly set out by the Supreme Court in its judgment no. 435 of 12 September 1973. This was reiterated in judgment no. 1738 of 14 March 1986 of the Supreme Court, which held that a place will remain a domicile “as long as it is kept as a home, [the taxpayer] returns there whenever possible and shows an intention to keep it as the centre of his family and social relationships.”

These judgments, then, refer to a legal concept of domicile identified as the place where the affairs and interests of a taxpayer are carried on regardless of actual physical presence in that place.

More recently the CTR of Milan in judgment 3665/2015 described domicile (third element of article 2 of the Consolidated Tax Code) as “the place where a person keeps the centre of his interests, meaning not only from an economic and asset perspective, but also from a moral and family one.” Domicile, continues the judgment, “consists mainly of a legal situation, characterized by the will of the person to establish, in that place, the headquarters of his or her moral and social relationships, as well as economic interests” (this has been confirmed recently in the famous judgment no. 392 of 18 January 2016 of the CTP in Milan, section no. 15).

These guidelines have also been confirmed at the international level by two rulings of the European Court Justice (judgments in the Ryborg Case C-297/1989 of 23 April 1991 and the Louloudakis Case C-262/99 of 12 July 2001) in which it categorically confirmed “residence” to mean “the professional and personal connection between a person and a particular place for the duration of that connection.”

Both rulings conclude that “residence” “must be regarded as the place where a person has established his or her permanent centre of interests.” This definition hinges on the international conventions against double taxation based on the OECD model where article 4 repeats the concept of a “pragmatic” tax residence anchoring it to the criterion of “vital centre of interests.”

It remains a complex framework in which to take advantage of the new season of voluntary disclosure available for foreign citizens.

di: Stefano Mazzocchi and Roberto Viscomi

Fonte: il sole 24 ore

Voluntary Disclosure

Voluntary Disclosure

Voluntary Disclosure, panoramica normativa nazionale ed internazionale sul rientro dei capitali estero vestiti, come previsto dal DL n. 4/2014.

“Il cerchio si sta stringendo attorno ai Paesi e alle banche che hanno consentito in questi anni l’esportazione illegale di capitali finanziari sottratti all’Erario, dunque alla collettività”. È questo il messaggio del recente intervento al Senato del Presidente del Consiglio per il voto di fiducia alla Legge di Stabilità 2014, a segnare il mutato atteggiamento del nostro Governo nel contrasto ai Paradisi fiscali e all’evasione internazionale che si è venuta a creare negli ultimi anni, anche con strumenti bilaterali e multilaterali da parte della Comunità internazionale (OCSE, G20, 1./E). L’obiettivo è quello di rintracciare i cittadini “pentiti” che hanno trasferito o che detengono illegalmente capitali all’estero senza più ricorrere a condoni o “scudi fiscali”, ma sulla base di un’autodenuncia del contribuente ovvero di favorirne il ravvedimento attraverso una riduzione delle sanzioni previste in via ordinaria e integrale pagamento delle imposte riferibili al periodo di accertamento.

Voluntary Disclosure

È quindi allo studio un meccanismo strutturale di “emersione volontaria” (voluntary disclosure) che agevoli il rimpatrio dei capitali “estero-vestiti” fondato sul comportamento collaborativo del contribuente: più è partecipativo meno sarà punito.

Non solo, colpire l’evasione consente di contrastare il riciclaggio di denaro di provenienza illecita, evidenziando uno stretto legame tra la normativa sul monitoraggio fiscale (D.L. n. 167/1990) e quella sull’antiriciclaggio (D.Lgs. n. 231/2007), così come emerge chiaramente dalle modifiche apportate ai due provvedimenti dalla Legge Europea 2013.

voluntary disclosure

Voluntary Disclosure normativa sul rientro dei capitali estero vestiti, decreto antiriciclaggio autodenuncia Svizzera quadro rw relazione Greco. Europa

Lo Studio Mazzocchi & Associati è particolarmente attivo nella gestione delle Voluntary Disclosure internazionali e nazionali.

Vi potete  rivolgere ai nostri uffici di Milano o presso la nostra sede di Lugano (CH) in Via Nassa n. 15 per richiedere ulteriori informazioni o preventivi.

Lo  Studio Mazzocchi & Associati nasce con l’obiettivo di rappresentare un’adeguata risposta alle ormai mutate esigenze di richiesta da parte del mercato e di fornire un servizio di consulenza innovativo e personalizzato.

Fin dall’inizio, lo scopo è stato quello di creare una struttura attiva ed organizzata, in cui ogni professionista potesse lavorare usufruendo delle capacità tecniche e dell’ esperienza di tutti.

Si è gradualmente creata una struttura di consulenza integrata e multidisciplinare che, condividendo rigorosità e stile, assiste i clienti nei principali campi economico – giuridici.

Ciò senza trascurare il tradizionale rapporto personale di fiducia cliente – professionista ma potenziandolo con il supporto di una organizzazione che valorizza le diverse competenze.


Voluntary Disclosure