In the end of 2014, Italian government approved provisions on money laundering and tax evasion, the so-called Tax Voluntary Disclosure Program. The results of the program are outstanding. As for September 2015, over 2.5 million Italians voluntarily disclosed a total of nearly €30 billion.
The legislation of Voluntary Disclosure aims at stimulating Italians to declare their investments and physical assets, including boats, jewelry, and real estate, which are kept abroad, and fulfill their tax obligations. This right for voluntary tax disclosure is provided before a taxpayer becomes an object for a criminal investigation related to tax assessment.
Italians who opt for voluntary disclosure are requested to:
- Identify any violation of tax law provisions;
- Indicate all financial activities that are held abroad;
- Declare full income related to the investments and financial activities held abroad;
- Make a payment of all taxes, interest, and penalties related to the abovementioned declarations.
Individuals, who apply for Voluntary Disclosure and fulfill all the requirements of the legislation, can benefit from the following aspects:
- Reduction of tax monitoring obligations up to 50%;
- Decrease of direct taxes and VAT up to 25%;
- Exemption from criminal investigation and prosecution related to tax evasion and money laundering.
Italian tax authorities claim that the total tax revenue gathered under the Voluntary Disclosure Program will be higher than €5 billion.