necessary for the determination of the undeclared income and activities (and this, for all the tax periods still auditable). The Voluntary Disclosure procedure will reduce the administrative penalties to half of the minimum amount provided by law if the following conditions are fulfilled: Italy or to any other country of the European Economic Area (i.e., any country of the E.U., plus Iceland, Lichtenstein and Norway); were held in any country of European Economic Area; intermediary to transmit to the Italian Tax Authority all the information regarding the assets held abroad. conditions not be met, the administrative penalties are reduced to three-quarters of the minimum amount provided by law. Further to the administrative penalties, amount of the unpaid taxes, which will be calculated by applying the ordinary rates on the undeclared income to be determined according to the usual methods of determination. For assets amounting to less than an average of 2 million euros, with regard to the tax years to be covered by the Voluntary Procedure, the taxpayer may choose to determine the taxable income in a simplified way, as 5 percent of the overall amount of the assets and then applying a tax rate of 27 percent on this lump sum taxable income. A main difference between Voluntary Disclosure and the previous three Italian tax amnesties is that Voluntary Disclosure provides for the full payment of the taxes due (and not of only a lump sum amount) and that the taxpayer will have to fully disclose all the relevant information and documentation. Should the disclosure be partial or untrue, the taxpayer can be charged with a crime punished with 18 months to six years of imprisonment. Moreover, Voluntary Disclosure will not ensure the taxpayer any benefit of anonymity (as was granted by previous A further consequence of Voluntary Disclosure, however, is that the taxpayer (or the legal representative of the corporation) will be free of liability for a wide range of criminal offenses. Namely, the taxpayer will no longer be punishable for the following crimes: return filing; payments; Italy aims to obtain the disclosure of 30 billion (thus available for investments in Italy) and 6.5 billion in cash by the end of 2015. Whether this is a realistic estimation or not will be judged by posterity. |