Today sees the first in a new series of posts from Gareth Horsfall who works for the Spectrum IFA Group where he provides his clients with an in depth understanding of the cross over between local and International tax planning structures.
Tax Evaders watch out
The Italian tax authorities have just come to an agreement with the government that Comuni will have the power to report suspected tax evaders and receive 100% of the fines/penalties for the next three years – as an incentive. This is good news for them when their municipal funds are running low due to cut backs at a Government level. After the 3 years, 2015 onwards, the Comuni can keep 50%.
And how will the Comuni be able to spot situations of tax evasion?
They will be able to compare individuals’ tax returns with their ICI declarations, rent contracts, property purchases and sales and domestic utility bills. For those people who have never made an income declaration in Italy but have a house and are resident, they could be an easy target.
Property abroad comes under the spotlight as well!
The Italian Government have now taken steps to tax Italian residents on the property that they own abroad. The tax of 0.76% is on the purchase value of the property. Failing production of that information it will be taxed on the market value of the property abroad (minus any tax that was paid abroad). This will be charged on an annual basis.
As a lawyer friend, here in Rome, pointed out:
“It raises all sorts of difficulties for expats who have retained a property in the UK or elsewhere, and will apply even where that property is not let.
Take the example of an ex-pat resident in Italy who inherits a family home of £400,000 value. That means an extra bill of £3,040 per annum.”
My opinion is that tax planning has never been so important in the time that I have been in Italy. The days of trying to avoid the various tax laws and find ways around the system are numbered if not dead already. Monti is making a real effort to clean up the system and he has given the authority and reward to the people who can make it happen.
However, there are still ways to legitimately reduce your tax liabilities in Italy and streamline your finances to make living here more easy.
If you would like to know more then you can contact Gareth direct at gareth.horsfall@spectrum-ifa.com or on 3336492356
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