The VOLUNTARY DISCLOSURE (L. 186/2014)

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The

VOLUNTARY DISCLOSURE

for Italian Taxpayers

(L. 186/2014)

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SUMMARY

A) FRAMEWORK

B) «VD» FOR ITALIAN TAXPAYERS

C) THE ITER OF «VD» AND THE (CENTRAL) ROLE OF

PROFESSIONALS

D) CASE OF A TAXPAYER WITH UNDECLARED ASSETS AND

INCOMES

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A) FRAMEWORK

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A) FRAMEWORK

1. There’s already a strong co-operations between Countries in

the exchange of informations and a new approach of Banks

and Foreign Exchange Dealer; the introduction of the

automatic exchange is going to be operational from

2017/18(CRS).

2. Introduction in Italy of self-laundering from 01.01.2015;

3. New Italian discipline of fiscal monitoring (ex. “European

Law” 97/2013, which modifies Law Decree. n. 167/1990) and

Circular 38/E of the 23° of December 2013 (RW).

4. Introduction of «Voluntary Disclosure» in Italy: Law

186/2014 (from 01.01.15).

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B) «VD» FOR ITALIAN TAXPAYERS

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L. 186/2014

Extension of subjective conditions and inclusion of the possibility of

“Domestic Disclosure”; Modifications of the objective conditions.

Extension of criminal breaches coverage for cooperative taxpayers

with review of criminal and fiscal sanctions framework .

Central Role of the Professional, who represent taxpayers before the

B) «VD» FOR ITALIAN TAXPAYERS

Central Role of the Professional, who represent taxpayers before the

administrations.

Coverage is extended to every violations committed until 30°

September 2014 (therefore up to December 31

st

_2013).

Final date for VD starting is set on the 30° September 2015

VD is accomplished only with the payment of all taxes, sanctions and

interests to the tax office through a single payment (or in three

monthly installments).

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VOLUNTARY DISCLOSURE

WHO?

International Disclosure/ National Disclosure

National: everyone;

International: individuals and entities of art.4 comma 1 D.L. N.

167/90

Fiscal years still under assessment, up to 2013 (included) can be

regularised.

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regularised.

WHAT?

Assets and income.

HOW?

Through the taxpayer's tax professional representative, who will

reach a settlement with the Italian tax office.

WHEN?

Until 30

th

_{September 2015}

NB: it can only be done once!

BENEFITS

Regularization of investments and financial activities, with

reduced administrative tax sanctions and, depending on each case,

with the exclusion of the main criminal sanctions. Taxes are to be

fully paid.

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ASSETS THAT CAN BE REGULARISED

BANK ACCOUNTS, SECURITIES,

FINANCIAL INSTRUMENTS (EQUITY, DEBT AND QUASI-EQUITY)

- Savings and checking accounts - Shares

- Bonds & similar securities

- Financial instruments (including non-participatory) and other financial assets

- Securities not representing goods, publicly traded certificates - Foreign currencies in savings and checking accounts

ASSETS THAT CAN BE REGULARISED

- Foreign currencies in savings and checking accounts - Italian government securities and other public securities CONTRACTS,

INSURANCE POLICY, TRUST, FONDATIONS, ETC.

- Financial agreements

- Capital-redemption and life insurance policies

- Derivatives contracts and other financial transactions abroad - Acts of disposal to Trusts, Foundations, etc.

REAL ESTATE, REGISTERED MOVABLE PROPERTY, METALS, JEWELS, ART, ETC. - Real estate

- Jewels, art, boats and cars

- Metals (raw or in coins) held abroad - Retirement funds

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THE RELEVANT TAX PERIODS

ORDINARY TAX

ASSESSMENT

PERIOD

(not criminal offences and no tax havens

UNFAITHFUL TAX RETURN – from 2010 to 2013 included

OMITTED TAX RETURN – from 2009 to 2013 included

9 no tax havens involved)

DOUBLED TAX

ASSESSMENT

PERIOD

UNFAITHFUL TAX RETURN – from 2006 to 2013 included

OMITTED TAX RETURN – from 2004 to 2013 included

NB:

a detailed analysis of the movements is performed for a full reconstruction, it is important for the VD to be shown in the legal and tax profiles.

It’s considered a flat procedure to calculate financial return for those checking account, whose average amount doesn’t exceed € 2M.

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WHITE LIST - D.M. 4 settembre 1996

Austria

France

Malta

Romania

Belgium

Germany

Netherlands

Slovenia

Bulgaria

Greece

Poland

Spain

Cyprus

Ireland

Portugal

Sweden

Denmark

Latvia

United Kingdom

Hungary

Benefit in relation to BLACK List Country, who sing an exchange information agreement with Italy , within 60 days from the law entry into force.

On the 15° of January 2015 Switzerland and Italy formally announced the signature

of the protocol for exchange of information. Formal signature is due on February

15

th

_.

Denmark

Latvia

United Kingdom

Hungary

Estonia

Lithuania

Czech Republic

Iceland (EEA)

Finland

Luxembourg

Republic of Slovakia

Norway (EEA)

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VIOLATION

TAXES

PENALTIES SET

FROM ORDINARY

LAWS

“VD”

SALE

“ADESION”

SANCTIONS

Non reporting RW Tax Havens 6% Rest of world 3% 1/4 1/2 1,50% (1%-0,50%) 0,50% (0,75% nwl) Unfaithful pers./corp. income tax Tax Havens 200% Rest of world 133% Italy 100% Tax Havens 240% 1/4 1/4 1/4 1/4 From 25% to 50% From 16,625% to 33,25% From 12,5% to 25% From 30% to 60%

NB: NB: the IVIE, IVAFE, IRAP and others should be considered, if any.

11 Omitted Tax Havens 240% Rest of world 166% Italy 120% 1/4 1/4 1/4 From 30% to 60% From 20% to 40% From 15% to 30% Unfaithful Omitted VAT 100% 120% 1/4 1/4 From 12,5% to 25% From 15% to 30% Unfaithful Omitted Tax on Inheritance 100 120% n.d. n.d. From 16,66 to 33% From 33,33% to 66,66%

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C) THE ITER OF «VD» AND

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FIRST MEETING

WITH CLIENT

KYC

SIGN OF MANDATE + POWER OF ATTORNEY + TRUTHFULNESS DECLARATION OF INFORMATIONS

Y

AML

+ INFO

WHEN? WHAT? HOW? WHERE? P P

C) THE CENTRAL ROLE OF THE ITALIAN

PROFESSIONAL IN THE VD PROCESS

WHERE?

Y

RECONSTRUCTIONS

ANALYSIS OF

FINANCIAL REPORT

VD DEFINITION

WITH UCIFI + ADE

UCIFI

CLIENT

€

CLIENT

PAY F24

€

IMPLEMENTATION OF A NEW TAX COMPLIANT

PLAN!!!

FOLLOW

UP

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APPLICATION FOR “VD”

STEP 1

(informal, for information only)

The facts of the violation are described, together with the amounts involved, in a timely, complete and accurate manner, without disclosing the client's personal details. This step is handled directly with the UCIFI, which is in charge of coordinating the procedure within Italy.

STEP 2 “NAME

DISCLOSURE“ /

The taxpayer is admitted to the procedure when the UCIFI issue the receipt confirming that the application has been filed.

The UCIFI will get in touch with the local “Tax Office” which is

Waiting for further info about creation of specific IT procedures (see the schedule draft in slide n. 15-DISCLOSURE“ /

also on the basis of an accurate reporting

The UCIFI will get in touch with the local “Tax Office” which is competent to issue the notice of assessment by determining taxes, interest and sanctions to be paid.

The Client is going to pay.

RESPONSABILITY FOR FALSE

DOCUMENTS EXHIBITION

Taxpayer is responsible and imprisonment from 1,5 to 6 years is provided by law!

Taxpayer must release a self-declaration to professional, which guarantee about the truthfulness and completeness of the documents.

in slide n. 15-16)

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www.Agenzia Entrate.gov.it

publish on 4/12/2014

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www.Agenzia Entrate.gov.it

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D) THE CASE OF TAXPAYERS WITH

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D) THE CASE OF TAXPAYERS WITH

UNDECLARED ASSETS AND INCOMES

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THE CASE OF TAXPAYERS WITH UNDECLARED

ASSETS AND INCOMES - PROBLEMS

The violations incurred by holders of undeclared funds abroad, within the

meaning of Article 4 (1) of Law Decree N.167/90, with rare exceptions, are

generally as follows:

• Evasion of Italian tax on

income which created the financial activities,

• Evasion of Italian tax on

income which created the financial activities,

and related income

;

• Violation of the

fiscal monitoring reporting,

required by the Law Decree

N.167/1990 as amended;

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Self-denunciation

through “voluntary disclosure” has the following

effects

:

• Full collection of all unpaid tax. A detailed reconstruction is performed with a

full analysis of the specific case.

• Administrative tax sanctions apply, according to Legislative Decree N.471/1997;

• Administrative tax sanctions apply, for violation of the RW Section reporting,

according to Legislative Decree N.472/97, with a further reduction of 50%.

• Interests according to the Law

CASE OF TAXPAYERS WITH UNDECLARED ASSETS

AND INCOMES - PROBLEMS

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• Interests according to the Law

With the following benefits:

• Regularisation of the assets disclosed;

• Significant reductions of sanctions related to taxes otherwise applicable;

• Exclusion from penal sanctions for violation from art. 2, 3, 4, 5, 10-bis e 10-ter

D.Lgs. N.74/2000;

•Exclusion from Laundering, ex art. 648-bis C.p.

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Some examples

A) In 2010 undeclared foreign income for 1M, (CH), with an annual economic rent 3%

Retake income 2010 , income of undeclared period and sanctions

_{ca 59% over K}

C) Sons inherit case A) 1° Jan 2013 – no exemption

B) In 2004 (disloyal) income evaded for 1M, in CH, with an annual economic rent 3%

Income of undeclared period and sanctions

_{ca 11% over K}

Any discount related to the Agreement Signed on 15° of January???

E) Articulate structure with Trust, Insurance Policy and SPV

Need to analyze each case separately

_{ca ?% over K}

C) Sons inherit case A) 1° Jan 2013 – no exemption

Income of undeclared period and sanctions

_{ca 45% over K}

D) Sons inherit case B) 1° Jan 2013 – no exemption

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THANK YOU

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At our firm, we have a dedicated “Voluntary Disclosure” team specialising in cross-border issues, which can rely on experience gathered in the field in Italy and the United Kingdom.

We are recognised in the international directories as one of the most experienced Italian firms in tax consulting, estate planning, trusts and inheritance/financial issues.

We call upon colleagues with specific expertise in civil and criminal law when necessary, so that we can

Dedicated VD Team @ Belluzzo&Partners

We call upon colleagues with specific expertise in civil and criminal law when necessary, so that we can add the top Italian professionals to the team handling your case.

We can advise trustees, trust companies, banks and/or beneficial owners, with special attention to their culture and language, with a specific approach and the capacity to manage the entire "Voluntary Disclosure" process, from initial contact with the UCIFI, to the tax negotiations and management of their effects.

We also pay especially close attention to the need to reorganise the client's assets and their legal architecture properly, in compliance with the Italian and international laws and regulations.

It is also possible to define structures that become fully Italian from the tax standpoint without losing their international legal dimension, to ensure optimal convenience for the various international players and their clients.

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This document has been prepared independently by Belluzzo&Partners and is for purposes of information only.

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Belluzzo&Partners makes no representations or warranties concerning the completeness and accuracy of the information, which is to be considered general commentary supporting the author's

Disclaimer & Copyright

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This document resulted from the study and research carried out by Belluzzo&Partners and by its partners and shall not be reproduced, distributed or published, in whole or in part, for any purpose, without the express authorization ofBelluzzo&Partners.

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These slides have been delivered on 10 February 2015

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