This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  

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.

Mailing List

Click here to manage your mailing list preferences, or view our privacy statement.

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


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


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


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


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


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


Madeira: Legal Framework and Formation Rules and Fees


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


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: Legal Framework and Formation Rules and Fees


Nevis: Legal Framework and Formation Rules and Fees


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


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 Legal Framework and Formation Rules and Fees

Latest News

Appleby Named Top Offshore Law Firm Of 2015
International law firm Appleby has been named Legal 500 UK's 2015 "Firm of the Year" in the Offshore category.

UK Consults On Non-Dom Tax Reforms
The UK Government has released details of its plans to abolish the permanency of non-domicile status through the introduction of a "deemed domicile rule."

LITRG Comments On UK's Personal Savings Allowance
The UK's new Personal Savings Allowance should be applied automatically to savings income, rather than tax being first deducted at source, the UK's Low Incomes Tax Reform Group has said.

Cayman Says UK May Change Tack On Central Registries
Acting UK Overseas Territories Minister Grant Shapps has said he is hopeful that the Cayman Islands and the UK can compromise on beneficial ownership transparency.

Jersey Finance Sector Supporting Economic Recovery
Jersey's Statistics Unit has reported that 2014 was the first year since 2007 that Jersey's economy grew in real terms.

Bahamas Seeking To Upskill Financial Services Workforce
he Bahamas Minister for Financial Services has emphasized the importance of the financial services industry for the territory, urging the industry to build on the expertise of local personnel.

Deadline Looms For HMRC's Contractors Amnesty
Accountancy firm Moore Stephens has reminded UK contractors who used "contractor loan" tax planning schemes that they have until September 30 to finalize settlements with HM Revenue and Customs or risk significantly larger bills.

Bermuda Trust Companies Receive STEP Awards
Two Bermuda trust firms have claimed top industry prizes at the prestigious 10th annual STEP Private Client Awards in London.

IRS Provides Guidance On Gifts From US Expatriates
The United States Internal Revenue Service has issued proposed regulations to give guidance under section 2801 of the US tax code that imposes a tax on US residents and citizens receiving gifts and bequests from expatriates.

New Zealand's Bright-Line Bill Passes First Reading
New Zealand's Taxation (Bright-line Test for Residential Land) Bill, which contains proposals to tackle non-compliance with tax rules on the sale of residential land, has passed its first reading in Parliament.

NZ Introduces Property Tax Bill
A bill proposing amendments to New Zealand's property tax regime was introduced before Parliament on August 24, 2015, following public consultation.

Director Appointed To IoM's New Central Registry
The Isle of Man has appointed a Director to lead the island's new Central Registry, after the amalgamation of several other registries with the Companies Registry earlier this year.

ACOSS Calls For Shake Up Of Australian Super Tax Breaks
The Australian Council of Social Service has said that with the cost of tax expenditures ballooning, there is a compelling case for structural reform of inefficient superannuation tax breaks.

Barclays Warns Expats Of Possible Account Closures
Barclays Bank has disclosed that it may close expat's accounts in Cyprus if they do not maintain a minimum balance of GPB100,000 (USD156,000).

UK Tax Amnesty Deadline Nears For Employee Benefit Trusts
UK companies that previously used Employee Benefit Trusts have until July 31 to take advantage of an HM Revenue and Customs amnesty, or risk substantially larger tax bills, accountancy firm Moore Stephens has said.