June 30 is the annual deadline for foreigners who are tax residents in Italy to file, together with their tax return, the Voluntary Disclosure form (RW Form) that includes income related to investments held abroad and taxes related to these assets.
It is often the case that foreign nationals who are tax resident in Italy still own assets in the country of origin, or in other countries where they may have lived for work purposes, and have purchased a property or left a current account.
First of all, it is important to clarify the obligations and duties of people who are foreign nationals but resident in Italy but with assets held abroad. Each year from the first tax period in which the foreigner is considered to be tax resident in Italy, they must compile and submit the RW form in order to comply with tax monitoring obligations and the two national taxes on assets held abroad, IVIE (tax on value of property located abroad) and IVAFE (tax on the value of financial assets held abroad).
This year, the Voluntary Disclosure form also contains boxes for the setting out of the taxes on the foreign goods mentioned above, namely IVIE and IVAFE.
The assets to be declared are those held abroad directly by the person who is resident in Italy, without the intervention of any intermediary who is also subject to tax in Italy. If there is an intermediary, then he or she will fulfil the obligations arising from the possession of the assets, including the settlement of the taxes due.
The RW Form must also contain the values of individual assets as of January 1 or from the day of commencement of ownership and those at the end of the tax period (December 31) or on the day on which the asset was sold or disposed of or that it is “physically” returned to Italy.
In addition to this information, it is also necessary to identify the foreign country where the assets or activities are allocated. If the assets are denominated in currencies other than the euro, currency conversion is required. In this case, both the initial value as of January 1 2016 or the start date of the ownership of the assets if later and the value at December 31 or earlier if the date of transfer or termination of activity is earlier, must be converted.
The exchange rate to be used will be the average for December 2015 (for assets held on January 1 2016) or of the month in which the ownership of the activity started or ceased, or that of December 2016 (in case of ownership as of December 31 2016 – see Circular No. 38/E/2013).
It should be noted that it is expressly set out in the legislation that, for the purpose of compiling the RW Form, the exchange rate on a particular date cannot be used, only the monthly average. Once the values of individual assets have been determined, it is important to remember that there are exemptions from declarations or tax for certain categories of goods or below certain quantitative thresholds.
Particular attention is paid to identifying the person that is the “actual owner” of the right or asset. Ministerial Circular no. 38/E of 23 December 2013 deals in part with this concept and its implications in operational and disclosure terms. The Circular strongly states that “not only the ’formal’ owners and the persons who have access to the foreign asset have to disclose it, but also those who can be considered the ’actual holders.’”
This definition of “actual owner” has been borrowed from the anti-money laundering regulations, and therefore shareholdings or assets held by foreign companies or trusts should also be declared if the holding is considered to be significant (more than 25%). The distinction in the declaration between the insertion of the shareholdings or the individual assets will depend on whether the host country allows exchange of tax information or not.
In the case where this is allowed, it will be sufficient to indicate the shareholding, otherwise the individual assets will have to be set out.
For those who have omitted to file or filed incomplete RW forms, it is possible, through starting remedial action, to remedy both omission and incompleteness by paying a significantly reduced sanction.
Finally, the rates for the individual taxes due are: IVIE is 7.6 per thousand of the taxable base (except for the main residence the rate for which is 4 per thousand of the value of the property), while IVAFE is 2 per thousand of the relevant value (except for current and savings accounts for which the fixed tax of €32.40 is due). Taxes are due in proportion to the days of possession during the year and to the percentage of ownership by the taxpayer.
di Stefano Mazzocchi & Roberto Viscomi
fonte: Il sole 24 ore
The season for automatic exchange of financial information, for tax purposes, of non-residents in Italy starts April 30. In fact, by that date, financial intermediaries must have sent the Italian Revenue Agency all information to implement the law of June 18 2015 n. 95 and Directive 2014/107/EU, which amended Directive 2011/16/EU on the automatic exchange of information in tax matters (in particular through the Common Reporting Standard – CRS).
This information will then be transmitted, by September 30 2017, to the authorities of the jurisdictions that adhere to the automatic exchange of information.
This exchange of information falls within the scope of international cooperation that is emphasized by both the OECD, through the CRS, and the United States with the signing of intergovernmental agreements for the implementation of the US legislation, Foreign Account Tax Compliance Act (FATCA).
In general the following personal data must be disclosed: name and surname, jurisdiction of residence, tax code identifying the country where the person resides, date and place of birth.
The financial data that must be exchanged are the account number, the name and tax code of the financial institution that is obliged to send data and the balance or the value of the account as at December 31 2016.
In the case of custody of financial assets, the gross revenues from portfolio management in addition to the balances must also be shared. The financial intermediary must also indicate the currency in which the data was collected.
It will be relevant to all the relationships with banks (i.e accounts, savings deposit and similar) in place after January 1 2016. For the relationship existing by December 31 2015, the law makes a difference between relevant accounts with a balance of $1,000,000 and not relevant when the balance is below that amount at the date above.
Depending on whether the account is relevant or not, there are higher or lower requirements regarding the verification to be carried out by the intermediary that has to send the required information.
Financial intermediaries will therefore be obliged to carry out and report on a type of tax due diligence on all accounts held by non-residents where the main duties consist of: a) verifying the truthfulness of the tax residence declared by the taxpayer who must show the residence certificates issued by the public institutions of the country in which he or she claims to be resident; b) the correct identification of the “Account Holder” who is the actual beneficiary regardless of the person who has the powers to manage the use of the sums in the account.
The regulation, among other things, provides that every year the actual account holder must be contacted at least once a year to verify the accuracy of the information required by the tax due diligence procedure. This must be done for at least 10 consecutive years from when the account is identified as an account subject to exchange of information on the basis of the rules described above.
From a look at the annexes to the legislation, today there are more than 90 states that have pledged to exchange information, with a division between those who will exchange information in 2017 (and therefore also for 2016) and those which have pledged to do so from 2018 which will cover information from 1 January 2017.
It should also be stressed that this regulation applies to both our citizens resident abroad for tax purposes and to foreign tax residents in Italy.
© ITALY EUROPE 24 – ALL RIGHTS RESERVED
Di Stefano Mazzocchi e Roberto Viscomi
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
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.
© ITALY EUROPE 24 – ALL RIGHTS RESERVED
di: Stefano Mazzocchi and Roberto Viscomi
Fonte: il sole 24 ore
Fra le principali disposizioni che entreranno in vigore il prossimo anno per effetto della Legge di Stabilità 2017, si inserisce il nuovo regime di determinazione dell’imponibile per le imprese minori, che passerà dal regime di competenza al regime di cassa (art. 5). Il passaggio, da un regime ad un altro, comporterà l’analisi di una serie di aspetti, tra i quali si segnalano:
-il mantenimento del regime di contabilità semplificata da parte dell’imprenditore al variare del principio di determinazione del reddito;
-l’esclusione, con la norma a regime, dell’importo delle rimanenze per le imprese in contabilità semplificata nella determinazione dell’imponibile;
– i nuovi obblighi formali necessari per effettuare le annotazioni “fiscali” che consentano una corretta determinazione del reddito stesso tramite l’applicazione del “nuovo” principio di cassa.
Con riferimento alla prima questione, com’è noto i limiti dimensionali di ricavi (pari a 400mila euro per le imprese che svolgono servizi e di 700mila euro per le altre attività d’impresa) sono rimasti inalterati ma la norma contempla una fase di transizione: per il 2016, il raffronto avverrà – per l’individuazione dei ricavi – ancora con il vecchio regime di competenza mentre, a far data dal 2017, i componenti positivi ai sensi dell’articolo 57 e 85 del Tuir si conteggeranno sulla base degli ammontari effettivamente percepiti. Ciò comporterà una attenta analisi nell’inquadrare ed iscrivere in contabilità i ricavi effettivamente di competenza del periodo d’imposta 2016. La classificazione dei ricavi, specie quelli maturati verso fine anno, ed in particolare gli “arbitraggi” di fine anno, dovranno essere valutati tenendo presente anche questa variabile. In tale contesto, si ricollega anche, in modo molto puntuale, la norma che prevede la detassazione per quegli elementi che, per competenza, siano stati annotati nel 2016 ma che solo nel 2017 avranno la manifestazione finanziaria. A tal proposito, il secondo comma introduce una specifica che appare di assoluto valore, ovvero che le rimanenze finali al 31 dicembre 2016 saranno oggetto di detassazione nei periodi successivi, quando entrerà in vigore il regime di cassa.
La corretta contabilizzazione delle rimanenze denterà, quindi, un altro elemento da valutare con estrema attenzione. Infine, nella bozza del testo al vaglio della Camera si inserisce con prepotenza il disposto del comma 5 del nuovo articolo 18 del Dpr n. 600/73, con il quale si statuisce che l’imprenditore, previa opzione, possa adempiere, con la semplice registrazione valevole ai fini Iva, all’annotazione distinta/separata degli incassi o dei pagamenti, così come previsto dai commi 2 e 4 del novellato articolo 18 del Dpr n. 600/73. Infatti con l’introduzione del nuovo regime per cassa, i contribuenti semplificati possono alternativamente annotare, istituendo due appositi registri in modo cronologico le entrate e le uscite effettuate nel periodo d’imposta oppure indicare distintamente nei registri Iva vendite o acquisti le entrate e le uscite.
Tuttavia, come già ricordato nelle righe che precedono, l’opzione prevista dal quinto comma introduce una presunzione per effetto della quale, le semplici registrazioni ai fini Iva, equivalgono ad equiparare la data di registrazione con quella di avvenuto incasso o pagamento. In sostanza saremmo in presenza di un criterio di determinazione del reddito che esula dal reale incasso/pagamento e che si fonda esclusivamente sull’annotazione formale della registrazione. Si tratta, quindi, di un terzo ed ulteriore criterio di determinazione dell’imponibile che accanto ai classici principi di cassa e di competenza, potremmo definirlo come il “principio della registrazione.”
di Stefano Mazzocchi
Da il sole 24 ore