Collaborative Compliance and Relations with the Italian Tax Office

With the entry into force of Law 9 August 2023 n. 111 the Italian tax system will see some innovations, including corrections and additions. The objective is to move towards a single tax rate with regards to IRPEF, through a rearrangement of the income brackets also in relation to the personal characteristics of the subjects. The enabling law also provides for a rationalization of VAT, together with measures aimed at strengthening the collaborative compliance regime for those activities characterized by high risks in the payment of taxes.
The law explains the general principles regarding tax law in reference to the context of the European Union and also at an international level with the desire to conform to what is currently the extra-national practice and avoid double taxation, making the Italian regime more competitive. The reform also concerns foreign owners of significant assets, outlining new opportunities for those who wish to move to Italy. In fact, this aims to implement competitive economic policies to encourage capital investment in Italy and the transfer of residence by this specific category of foreigners.
The regulation of tax residence is therefore revised, bringing it into line with international customs. Italy, as an attractive country for wealthy people, would therefore see the real estate values of its most prominent cities further increase.
The benefits for new residents would also include exemption from inheritance and donation taxes on transfers from outside the national territory. For those coming from France, the United Kingdom or Switzerland, the measures outline an attractive situation as inheritance taxes for large estates are more demanding in these countries.
Wealthy foreign citizens can therefore take advantage of the “flat tax” regime (Art. 24-bis of the TUIR) without particular limitations in the recognition of the necessary requirements. However, they must not have previously had family or work ties with Italy.
Questions regarding long-term retention in this regime remain open, as individuals with large net worths generally entrust their management to entities such as foundations or trusts. The need therefore arises to delve into aspects linked to the risk of sanctions.
To manage the ongoing relationship between the holders of important assets and the Italian tax system, a specialized office of the Italian Tax Revenue Agency is established to carry out ongoing discussion and tutoring activities.

A collaborative compliance regime is therefore outlined for those who transfer their residence to Italy or for those who, maintaining it abroad, have an income in the national territory equal to (or higher) than one million Euros.
Certainly positive news as it is a sign of stabilization of relations between the Italian tax authorities and wealthy foreign entrepreneurs.

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