Swiss-Italian Double Tax Treaty about to come to signature
In the coming few weeks Switzerland and Italy are expected to sign the new Double Tax Treaty, which represents a very important step in the relationship between the two countries.
Thanks to the signature of the Agreement, Italian taxpayers will be able to know the rules and the costs for accessing the brand new voluntary disclosure procedure. This latter will allow them to regularise their assets illegally held in Switzerland and which escaped the control of Italian tax authorities. At the same time, the Treaty should mark the beginning of a new era between the two countries, characterised for a broader cooperation and a lower hostility by Italian authorities towards Switzerland. The Confederation is in fact expected to be finally removed from the Italian black list of tax haven jurisdictions.
The era of Swiss bank secrecy for tax purposes has come to an end already for some years, owing to the great pressure exerted by the most influent international organisations and the most industrialised countries facing the financial crisis. Granting access to information relevant for tax purposes to foreign States has recently become the general global trend, so that no place in the world still exists to hide assets from tax authorities and escape taxation. The initiative on tax transparency and exchange of information launched by the G20 and the OECD in 2009 is achieving the expected results. All those countries, that were safe havens from unfair taxation, are now ready to give up their traditional confidentialilty and transfer all requested information to the tax authorities of foreign countries.
The Italian law on voluntary disclosure recently approved by the Parliament and entered into force on 1 January 2015 has fostered the need for black-listed countries to conclude an agreement with the Italian government within 2 March 2015.
The Italian voluntary disclosure procedure, in fact, represents an unprecedented initiative launched by Italy for the regularisation of assets held abroad and for the payment of tax due. While the past series of tax shields and tax amnesties weakened the trust of Italian taxpayers in the whole tax system and in its enforcement, this seems to be the last chance to become tax compliant. Evaders will be granted a reduction of the penalties, but they will have to pay all unpaid taxes. It can be objected that the cost of the voluntary disclosure procedure can be too high. However, not taking advantage now from this last call exposes taxpayers to higher risks. Once the exchange of information for tax purpose becomes effective, evaders could easily be caught and sanctioned with heavier administrative and criminal penalties.