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November 2020: new clarifications of the Revenue Agency

Compliance letters and fiduciary mandates

The provision of the director of the Revenue Agency of 6 November 2020 has provided the new compliance promotion campaign, addressed to all citizens residing in Italy, holders of financial assets outside the border.

Once the selective lists of taxpayers were formed, based on the data received from the foreign tax administrations through the automatic exchange of information, it was possible for the Italian Tax Authority to send the previously announced compliance letters.

From the communications received in these days, the Revenue Agency has shown that it is possible to identify with extreme precision some relevant data, including the financial institution, the account number, the balance and the currency, as well as a series of income data such as dividends, interest and gross income. However, some issues are emerging in the Agency's documents. Among all, it is possible to note the presence of numerous communications relating to activities correctly conferred by taxpayers in a fiduciary mandate.

More precisely, from a first analysis, it would seem that the Financial Administration is unable to cross correctly the data, in order to identify the foreign assets conferred by the taxpayers in a fiduciary mandate without registration.

This could lead to a massive forwarding of communications, which, however, will not have any positive repercussions for the Treasury coffers. Conversely, this mandatory communication will burden the taxpayer with the burden of clarifying a position that, paradoxically, had been conferred in a fiduciary mandate precisely for the purpose of delegating the management, also and above all of fiscal duties, to specialized third party intermediaries.

Flat Tax for Retired taxpayers

With the ruling response of 24 November 2020, n. 559, the Revenue Agency clarified that the Luxembourg social pensions allow access to the flat tax pursuant to art. 24-ter Tuir.

The preferential regime applies to physical persons holding pension income paid by foreign subjects, who transfer their tax residence to one of the municipalities of Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise and Puglia. This regime applies if the taxpayer moves to a municipality with a population not exceeding 20 thousand inhabitants, or in one of the municipalities, with a population not exceeding 3 thousand inhabitants, affected by the 2016 earthquake.

For access to the regime, nationality is not relevant, provided that the taxpayer has been a tax resident abroad in the last 5 years in a country with which Italy has a double taxation agreement or a Tiea, or adheres to the Convention on Mutual Administrative Assistance in Tax Matters.

Under these conditions, income of any nature produced abroad (not only pensions therefore) can be subject to a flat-rate substitute tax of 7 percent, applicable for a maximum period of 10 years. This facility also includes pensions paid by the Grand Duchy of Luxembourg to a Luxembourg citizen who has transferred his residence to Italy.