Compliance letters issued by the Italian Tax Authority
As happened last year, the Italian Tax Authority could notify to Italian taxpayers the “communication for the promotion of voluntary compliance”, better known as compliance letter, regarding financial assets and properties held abroad, for which the taxpayer did not comply with the requirements for fiscal monitoring and did not comply with the payment of property taxes related thereto.
It is recalled that due to the automatic exchange of information among Tax Authorities who signed the Common reporting Standard (CRS) and FATCA (for the U.S.), Tax Authorities will disclose many relevant information for tax purposes, such as real estate, bank accounts, stock & bonds, insurance policies, etc held abroad by Italian taxpayers (including, for instance, countries as Switzerland, Austria, the Monaco, Singapore, Saudi Arabia.
The (automatic) exchange of information concerns primarily the bank account value or balance, the gross amount of interests, dividends, other passive income, payed or credited, that accrued within the taxable year for which the exchange of information is made.
Therefore, the information above is used by the Revenue Agency in order to check the proper filing of the tax returns of each taxpayer, with a focus on the fulfilment of the fiscal monitoring requirements, on the payment of property taxes (IVIE and IVAFE) and on the payment of income taxes on foreign source income.
The taxpayer that fails to comply with the above obligations, even though he or she did not receive any compliance letter, can proactively regularize his/her position through the self-assessment of late tax payments. The taxpayer will then have to submit a supplementary income tax return and pay the tax with reduced penalties and interests.
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