Categorie archief: EU & Italian International Tax Law Blog

EU & Italian International Tax Law Blog

US Tax Administration Issued Final Regulations on FATCA Implementing International Tax Reporting and Compliance

 On January 17, 2013 the IRS issued final regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities.
Under the Foreign Account Tax Complianc… Lees verder

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Reciprocal Inter Governmental Agreement Will Introduce Automatic and Reciprocal US-Italy Disclosure and Exchange of Information For Tax Purposes

The Foreign Account Tax Compliance Act (FATCA) was enacted by the United States Congress in March 2010 and became effective on January 1, 2013. It is intended to assist US efforts to improve international compliance with US tax laws and will impose certain due diligence and reporting obligations on foreign (non-US) financial institutions which hold financial accounts for US customers. Under the new law, foreign financial institutions will provide to the U.S. tax administration automatic information about their US customers’ financial accounts. 

On 26 July 2012, the U.S. Department of the Treasury published a Model Inter Governmental Agreement which will form the basis of bilateral IGAs with jurisdictions that wish to adopt this alternative means for their financial institutions to comply with FATCA while minimizing compliance burdens.

Italy joined the U.S. with a groups of other countries in a Joint Statement announcing that Italy will enter into and use the reciprocal agreement with the United States to implement FATCA and enact a system of reciprocal automatic exchange of information pursuant to which:

– Italian banks and financial institutions will provide the US tax administration with information about Italian banking and financial accounts held by U.S. customers with Italian banks in Italy,

– U.S. banks and financial institutions will provide Italy’s tax authorities with information about US banking and financial accounts and investments held by Italian customers with US banks in the United States.        

The Model IGA follows the U.S. Department of the Treasury and Internal Revenue Service’s release of proposed FATCA regulations, and the simultaneous announcement of an intergovernmental alternative to FATCA implementation, on 8 February 2012.

On January 17, 2013 the Treasury Department and the Internal Revenue Services issued the set of Final Regulations implementing the information reporting and back up withholding tax provisions of FATCA, with far reaching implications for U.S. taxpayers with Italian bank and financial accounts, as well as Italian taxpayers with US bank and financial accounts,  in addition to foreign financial institutions as well as US banks as explained above.   

 

 

 

It is now out of question that FATCA will be fully implemented, and as soon as the reciprocal IGA is signed, the new system of automatic and reciprocal exchange of information between Italy and the United States pursuant to FATCA will be in place. 

As a result, Italian taxpayers with banking and financial accounts with US banks would have to make sure that: 1) those accounts are properly reported on Model RW of their Italian tax return, 2) any income arising from those accounts is properly declared and subjected to tax in Italy, 3) Italian tax on foreign investments deposited on those accounts is regularly and timely paid.

Conversely, US taxpayers with Italian banking and financial accounts would have to make sure that 1) they report their Italian accounts on the US foreign bank account report (“FBAR”) due within June 30 each year, as well as on form 8938, and 2) any income arising from their Italian accounts is properly reported and taxed in the United States.

As a result of FATCA and implementing IGAs, international tax reporting and compliance is now mandatory and no longer optional, considering that tax authorities will have automatic access to relevant information to use for their audits and enforcement activities.           


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Italian International Tax Reporting Rules Through Part RW of Italian Tax Return

Italian resident taxpayers are required to report to the Italian tax administration their foreign financial investments and assets, which can generate foreign-source income subject to tax in Italy. They report their foreign investments by filling out a… Lees verder

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Italian Supreme Court Reverses Course on Permanent Establishment Issue

With its Ruling n. 3769 issued on March 9, 2012, the Italian Supreme Court significantly departed from its previous line of decisions on the issue of characterization of a foreign-owned Italian company as the permanent establishment of its foreign parent.

The case in which the ruling has been issued involved Boston Scientific S.p.A., an Italian joint stock company (“BS SPA”) whose stock is  owned for 99 percent by Boston Scientific B.V. (“BS B.V.”) a Dutch company  and for the remaining 1 per cent by Boston Scientific Corporation, a U.S. corporation (“BS USA”), which in turn controls BS B.V.

BS USA was engaged in the business of designing, manufacturing and selling medical equipment and devices. BS SPA operated as commission agent for BS B.V. for the purpose of the marketing and sale of the products of BS USA in Italy and the EU. 

From the summary of the facts as reported on the Supreme Court Judgment it appears that BS SPA acted under the management direction and control of BS B.V,, operated exclusively for BS B.V. as its only  client  and signed sales contracts with customers under its own name although in the interest of and pursuant to the final approval from BS B.V.    

The Italian tax agency took the position that BS SPA lacked economic and legal independence from BS B.V. and it operated as agent of BS B.V. according to the substance of its business dealings with its principal and final customers, even though it normally signed the contracts in its own name.  As a consequence, the tax agency re-characterized BS SPA as the permanent establishment of BS B.V. in Italy and assessed additional taxes and penalties on BS B.V., which should have accounted separately for its sales of products carried out in Italy through BS SPA, file its own Italian corporate tax return and pay the Italian corporate income tax on its net profits from its Italian sales accordingly.

Both the Italian Tax Court and the Appellate Court ruled in favor of the taxpayer and rejected the agency re-characterization and tax assessment, motivating their decisions with the fact that BS SPA had its own separate business organization of which it sustained all the costs, had assumed the economic risks of its business operations and was legally bound by the contracts it signed with the final buyers of the products under its own name as seller.

The Supreme Court affirmed the decision of the Appellate Court concluding that it was sufficiently and adequately motivated and that the grounds for appeal set forth by the tax agency were not sufficiently explained and could not be considered.

The Court in particular referred to the provisions of article 5 of U.S.-Italy tax treaty and argued that the Italian tax agency failed to explain the reasons why those provisions should be read in a way to create a permanent establishment when an Italian company contracts under its own name and risks and bears the economic cost of its business organization through which it conducts its business in Italy, for the sole fact that it is owned and controlled by a foreign company and operates under the supervision and directions of its foreign parent company.

Ruling 3769 is very encouraging. Indeed, the ruling seems to depart from the Supreme Court’s previously established case law stemming form its 2002 decisions in the Philip Morris case and to provide more clarity for foreign businesses which plan to expand their operations into Italy. 


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Imprese italiane che investono sul mercato americano: migliori pratiche legali e fiscali

Il 17 Settembre scorso ad un convegno organizzato dalla American Chamber of Commerce in Italy a Milano abbiamo illustrato i principali aspetti legali e fiscali che le imprese italiane che investono sul mercato americano si trovano ad affrontare. Gli St… Lees verder

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Presentazione Università Roma Tre 17 Maggio 2012

In data 17 Maggio 2012 presso l’Università degli Studi di Roma Tre, nel contesto del master per Giuristi e Consulenti di Impresa gestito dal Prof. Tinelli, lo studio MQR&A ha riferito sul tema “Aspetti internazionali della fiscalità americana di interesse per gli investitori esteri”.

La relazione, sia pure sintetica, ha inteso offire un breve excursus sui principi fondamentali di diritto fiscale internazionale americano applicabili agli investimenti e alle attività estere negli Stati uniti.

Gli Stati Uniti costituiscono tuttora il maggiore mercato del mondo di destinazione di attività e investimenti internazionali e attraggono costantemente imprenditori, professionisti, personale d’azienda e investitori esteri. La conoscenza del regime fiscale applicabile a questa categoria di soggetti ed attività è cruciale, in un contesto sempre più difficile e complesso di crescente globalizzazione e maggiore attenzione da parte delle amministrazioni fiscali.          


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Presentazione API Torino 14 Maggio 2012

In data 14 Maggio 29012 lo studio MQR&A ha presentato alle imprese italiane interessate presso l’Associazione delle Piccole e Medie Imprese di Torino una relazione dal titolo “Fare Business negli USA – Casi di studio e analisi dei principali profili legali e fiscali”.

Le imprese italiane che fanno business con o negli USA sono numerose. Le forme di business variano dalla esportazione diretta dall’Italia o vendita tramite agenti e distributori locali, alla fornitura di beni con prestazione di servizi accessori (installazione, assistenza post vendita) tramite proprio personale in loco, alla costituzione e gestione di società di diritto locale controllate dalla capo-gruppo o casa madre italiana.

Ciascuna forma presenta peculiarità e aspetti giuridici e fiscali che devono essere gestiti in maniera consapevole onde evitare rischi. Il sistema legale e fiscale americano è complesso e non consente di operare in maniera improvvisata.

La presentazione aveva lo scopo di fornire una disamina sommaria dei suddetti aspetti che consenta alle imprese di mettere in atto il giusto set up e la corretta struttura di gestione legale e fiscale dei propri affari e delle proprie attività negli Stati Uniti.


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Article on the section LEGAL of Italian newspaper FINANZA & MERCATI

We provide below the link to an article on the U.S. Offshore Voluntary Disclosure Program appeared on the section LEGAL of the Italian newspaper FINANZA & MERCATI:
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IRS Announced Reopening of Tax Amnesty Program For Undisclosed Foreign Financial Accounts

On January 9, 2011 the Internal Revenue Service reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous … Lees verder

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The IRS Issues Guidance on International Tax Reporting For U.S. Citizens or Dual Citizens Residing Outside of the United States

The Internal Revenue Service (U.S. tax administration) issued guidance (in the form of Fact Sheet FS 2011-13) on international tax reporting requirements for U.S. citizens or dual citizens residing outside of the United States.
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Italy’s New Tax on Foreign Real Estate Property

Recent legislation enacted by the Italian government to improve Italy’s budget and stem the sovereign debt crisis introduced a new tax on real estate properties located outside of Italy. The tax is charged at the rate of 0.76%, calculated on the purcha… Lees verder

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2012 New Self-Reporting Requirements For Foreign Financial Assets

Starting with the tax year 2011, the new IRS Form 8938 must be filed by all U.S. persons if total foreign financial assets exceeded $50,000 at any point during the year.  Form 8938 will be in addition to the long-standing Treasury Department FBAR … Lees verder

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Trust and family and succession planning

Trusts are very important tools for family and succession planning. Italy enacted specific provisions on the tax treatment of trusts for income tax and indirect (transfer) tax purposes. However, Italy does not have specific legislation on trusts, and t… Lees verder

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Trust e pianificazione familiare e successoria

Il trust è uno strumento molto importante per un’efficace pianificazione familiare e successoria. L’Italia ha adottato una specifica normativa fiscale sul trust ai fini delle imposte dirette ed indirette, ma non ha una legislazione civilistica i… Lees verder

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Interview with MQR&A on Italian financial newspaper Italia Oggi

An interview on Marco Q Rossi & Associati has been published today on the Italian financial newspaper ITALIA OGGI. We attach below the file with the full account: www.lawrossi.com/images/stories/docs/MQR_Italia_Oggi.pdf  Lees verder

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