The procedure is expected to be fully introduced by the end of this month, after initially being proposed in January this year and redrafted in May.
In a similar manner to programmes such as the Liechtenstein Disclosure Facility (LDF), the programme will give Italian-resident taxpayers until 30 September 2015 to ‘normalise’ their relationship with the tax authorities.
However, unlike many other disclosure programmes, Italy’s proposal will be extended to allow corporate entities, trusts, and non-commercial entities to participate alongside individuals.
According to Giulia Cipollini, head of tax, Italy, at international law firm Withers, this aspect has been introduced to allow for individuals with assets in non-commercial entities to make a full disclosure of their undeclared assets.
“It is likely that the authorities are particularly thinking of entrepeneurs and family-owned businesses, which constitute a large proportion of Italy’s business community,” she added.
The programme will also allow individuals and businesses to bring to light undisclosed onshore assets alongside their offshore assets.
Cipollini said that the Italian government expects up to €1.5bn (£1.2bn, $1.5bn) of foreign assets to be disclosed, with 80% of that involving assets in Switzerland.
“According to the last version of the bill, all participants will face a minimum penalty of 3% of the value of the assets concerned, with one third of the penalty due to be paid within 60 days,” she added. “These features are remarkable, and mark out the programme from other similar initiatives, and will no doubt have a big impact on the popularity of the programme.”
“Moved the goalposts”
In August, the United Kingdom’s HM Revenue & Customs “moved the goalposts” of the LDF, preventing users of UK employee benefit trusts from being granted access to the full tax saving benefits of the programme.
The government body said the agreement would “level the playing field”, after it decided that many EBT users were using the facility in a way that was “not intended”.
The LDF enables UK citizens to voluntarily declare previously undisclosed assets to HMRC with the offer of more favourable terms than other tax investigations.
Participants normally receive a fine of 10% of the tax due instead of 100%, and tax interest and penalties are mostly sought for the previous 10 years rather than the previous 20 years.
