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.