Frequently Asked Questions
Question: What measures has the Monti government adopted, or is planning to adopt, to combat tax evasion and tax avoidance?
Reply: For many years, the Italian economy has suffered from widespread tax evasion and avoidance, which has had repercussions on the ‘fair society’. Recent estimates conducted by ISTAT and the Revenue Agency reveal a disturbing picture: tax evasion accounts for 18% of the gross domestic product. The Monti government has therefore resolved to make combating tax evasion one of the main planks of government action, for which it has put in place a range of measures.
A. Fiscal transparency regime.The first and most important measure has been the introduction of the regime to reward transparency. The "fiscal transparency" regime rewards companies and individual professionals who voluntarily agree to comply with formalities to step up tax inspections and assessments. These benefits are available to taxpayers practising artistic or professional activities, individual traders and members of partnerships. What is innovative about the new tax regime is that it combines the voluntary acceptance of formalities to enhance the tax authorities' inspection powers (such as introducing electronic billing and the automatic registration of remuneration, with the automatic forwarding to the tax authorities via the Internet of invoices issued and payments received not subject to invoicing, and the traceability of banking transactions) with a series of benefits.
These include in particular:
- 1)a substantial reduction in administrative formalities;
- 2) access to assistance – “tutoring” – from the Revenue Agency. This tutoring offers numerous benefits. For example, it guarantees that the Revenue Agency automatically produces settlement, payment and VAT return forms and the simplified 770 model for tax collectors, ensuring considerable savings to taxpayers.
- 3) instituting a fast track for refunds and VAT offsetting operations (the latter being particularly important for exporters).
B. Voluntary application of statistics-based tax assessments (‘studi di settore’). Taxpayers subject to statistics-based tax assessments who declare income or remuneration equivalent to, or above the standard level set for the application of the statistics-based tax assessments, also as a result of adjusting, are eligible for a number of benefits. The condition that must be met for these provisions to apply is that the taxpayer's position must be consistent with the specific indicators in the decree approving the statistics-based tax assessment applicable to them. They must therefore be taxpayers declared to be "eligible" and "compliant" (‘congrui’ and ‘coerenti’).
C. Lowering of the ceiling on payment traceability. A further measure to prevent the financial system from being used for money-laundering purposes is the lowering of the ceiling on legal cash transactions and unregistered securities and bearer bonds from €2,500-€1,000. This can improve the effectiveness of the measures to combat illegal financial transactions and at the same time strengthen the means used to combat tax evasion.
D. Stepping up inspections throughout the whole national territory. In the first few days of 2012, inspectors from the Revenue Agency embarked on a penetrating system of tax inspections throughout the country. The Agency has a robust tax inspection programme to track down tax evaders, and where necessary impose penalties.
For more information consult the Documents.
The first document illustrates:
- 1. The results of the work of the Revenue Agency to combat tax evasion and tax fraud in the three-year period 2008-2010;
- 2. A concise explanation of the objectives of the December 2011 measures to identify the amounts being evaded and to combat tax fraud.
The second document describes the five instruments used to combat tax evasion:
1. The benefits available to transparent taxpayers (small businesses and the self-employed);
- 2. The benefits available to taxpayers (small businesses and the self-employed) whose tax situation is consistent with the statistics-based tax assessments;
- 3. New restrictions on the use of cash;
- 4. Making all financial transactions available to the tax authorities;
- 5. The introduction of a new crime of making false tax returns and statements to the tax authorities.
Page published on 02/03/2012
