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San Marino Looks For New Role, As Italy Investigates Possible VAT Fraud

Wednesday, February 24, 2010

San Marino’s government has begun an examination into all aspects of its economic future, particularly its relationship with Italy, but has been thrown off course by Italian investigations into possible value added tax (VAT) fraud involving San Marino.

Following the country’s recent difficulties, caused partly by the global economic recession, but also by the necessity to put in order its reaction to new international tax and banking secrecy regulations, San Marino’s government is looking at all possible solutions to re-launch its economy.

It is recognized that measures will be required, including new commercial regulations and laws regarding residency and a modernization of the country’s bureaucracy to attract corporate investment. In that respect, the government has committed San Marino to a rapid implementation of all European Union regulations, and the conclusion of all agreements which could be useful in helping the country’s businesses internationally.

At the same time, it is particularly looking for a normalization of its relationship with Italy as soon as possible. It feels that the previous efforts it has made to collaborate and achieve tax transparency with Italy have not, in its view, been sufficiently recognized by that country.

San Marino has hoped for some time to conclude the protocol for the exchange of tax information to the San Marino-Italy double taxation agreement, which was signed in 2002 but never ratified.

Conclusion of the agreements with Italy has been delayed, above all, by the operation of the Italian tax amnesty, which has been extended to end-April 2010. However, development of normalized relations with Italy has been further affected by the announcement of investigations into possible VAT fraud, involving San Marino, by Italy’s Guardia di Finanza (financial police).

It is reported that the Guardia di Finanza is investigating import-export transactions involving more than 500 companies. In particular, the Guardia has discovered that, from 2006 to 2008, purchases and sales to and from San Marino and Italy of computers, mobile phones and hi-fi equipment was, in certain cases, more than 50% of the total trading volumes of the similar products between Italy and much larger countries, such as Spain and the United Kingdom.

According to the Guardia, only a small proportion of those transactions consist of regular trade with San Marino; the remainder being swollen by artificial trades with the objective of VAT avoidance, and thereby lowering the price at which they can be sold in Italy.

The Guardia has announced that, out of the 65 companies already investigated, 42 have been charged with tax evasion. The total amount of the transactions found to have been fraudulent was said to reach over EUR400m (USD544m), with unpaid VAT of EUR125m. Those figures can be expected to rise significantly as further cases are verified.

In addition, in the same regard, the Guardia has doubled its presence on the borders between San Marino and Italy in order to check vehicles suspected of illegal trafficking in goods and money.

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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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