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Italy Confirms Removal Of Foreign Capital Declaration Threshold

Monday, December 30, 2013

In a circular dated December 23, 2013, the Italian Revenue Agency has confirmed that individual taxpayers should now declare on their tax returns all capital held abroad, as the previous threshold of EUR10,000 (USD13,700) no longer applies.

The Agency's clarification is in line with the latest modifications introduced to ally Italian regulations with European Union (EU) law and, in particular, with the need to ensure compliance with the obligation to declare all foreign capital held to the relevant tax authorities of member countries.

The sections of individual income tax returns that collected information on transfers to and from non-residents have also been abolished, and the new taxpayer obligation has been extended to a declaration of all assets and investments held abroad and over which he or she has the "effective title" (a concept borrowed from anti-money laundering rules, which includes capital held in corporate or trust structures).

The EUR10,000 limit, under which, previously, a declaration was not required, has thereby been eliminated, and it has been specified that all individuals that exercise control over at least 25 percent of the assets of an entity are to be considered as having an "effective title."

However, for example, Italian residents who work abroad for the Government, and those who work in border areas or in neighboring countries, particularly Switzerland, are exempt from the new obligation, as long as such employment has been undertaken continuously for the majority of the tax year, and the individual repatriates all foreign assets on re-entry into Italy.

In addition, taxpayers who put all of their financial assets and wealth in the hands of an Italian financial intermediary will be absolved from all aspects of the new control procedures.

After the recent approval of the 2014 Budget, the penalty fees for failure to declare assets will be reduced to between 3 percent and 15 percent of the amount of funds undeclared (from between 1-0 percent and 50 percent previously), to which is added the risk of confiscation for the full value.

Those sanctions have been increased to between 6 percent and 30 percent when the undeclared financial and investment assets are being held in a "tax haven" jurisdiction on Italy's black list.

On the other hand, reduced sanctions, down to one-half of the above minima, are available in exceptional circumstances, and a penalty of only EUR258 is charged if the necessary declaration is presented within 90 days of its due date.

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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