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Italy: New exchange of information rules implemented in Italy

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Giuliano Foglia


Giovanni d’Ayala Valva

On March 17 2014 the Directive No. 2011/16/EU (Mutual Assistance Directive) was implemented in Italy through Legislative Decree No. 29 dated March 4 2014. The Mutual Assistance Directive was adopted by the European Council on February 15 2011 and provides for a more effective and efficient exchange of information between member states, based on the mandatory automatic exchange of information – as a general rule – and the exchange information on request with specific time limits to answer.

In particular according to the Decree, Italian competent authorities shall automatically communicate to a member state information regarding taxable periods as from January 1 2014 and related to a resident in such member state in relation to: income from employment, director's fee, life insurance products not covered by other EU legal instruments on exchange of information and other similar measures, pensions, ownership of and income from immovable property. A proposal of revision was presented by the European Commission to extend the scope of application of the Directive to dividends, royalties and other finance income.

The Decree also provides certain exclusion such as: VAT, custom duties and excise, certain compulsory social security contributions; certificates and other documents issued by public authorities and dues of contractual nature.

Indeed, the Decree falls within the growing need for transparency and exchange of relevant tax information that have become a global milestone in the international relationships between the states and, in particular, to support the fight against tax evasion, tax fraud and tax avoidance. In this situation, the EU Savings Directive was also recently revised to implement a "new single global standard for automatic exchange of information".

With specific regard to Italy, the Decree has consistently amended the domestic procedure adopted in 2005 to regulate the cooperation within competent authority of EU member state in line with internationals standards.

With respect to cooperation outside EU borders, the bilateral treaties signed by Italy generally do not provide for an extensive exchange of information clause similar to Article 26, paragraph 4 and 5, of the OECD model.

In this situation, Italy has recently shown a positive approach versus the exchange of information for tax purposes in particular when negotiating new bilateral or multilateral treaties through the introduction of extensive exchange of information provision in certain treaties protocols (for example Mexico, Bermuda, Mauritius) as well in some treaties not yet in force (Libya and Panama).

Furthermore, Italy has recently signed (i) the Foreign Account Tax Compliance Act with the US and (ii) four tax information exchange agreements (with the Cook Islands, Bermuda, Guernsey and Jersey) which provide extensive information clauses, allowing for the exchange of information held by banks, nominees and other persons acting in an agency or fiduciary capacity.

Giuliano Foglia (foglia@virtax.it) and Giovanni d'Ayala Valva (dayala@virtax.it)

Tremonti Vitali Romagnoli Piccardi e Associati

Tel: +39 06 3218022 (Rome); +39 02 58313707 (Milan)

Website: www.virtax.it

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