ITALY Law and Practice Contributed by: Giuliano Foglia, Foglia & Partners
5.5 Role of Tax Authorities and Enforcement Measures Both the Italian Revenue Agency and the Italian Tax Police (“Guardia di Finanza”) (jointly, the Italian Tax Authorities) are competent to perform control and assessment activities to verify the correct fulfilment of tax obligations. However, the Italian Revenue Agency is the sole body competent to issue final assessment and payment notices. Generally speaking, Italian Tax Authorities carry out control activities on the tax returns filed, first through computerised procedures and documentary checks (“formal audits”), then through full audits. Formal audits are mainly aimed at assessing the cor - rectness of tax returns and are carried out through: • computerised procedures targeted to assess that data reported and taxes calculated in the tax returns are consistent with the data directly present in the tax returns themselves, as well as with those held in the database of the Italian Tax Authorities; • documentation and information requests to the taxpayers on the data reported on the tax returns. Full audits consist of a deeper scrutiny of the correct fulfilment of taxpayers’ general tax obligations. Ital - ian Tax Authorities can carry out substantive audits through different means: • documentation and information requests to the taxpayers; • access and inspections, upon specific authorisa - tion by the competent bodies, at the taxpayers’ premises (ie, home or premises used to perform economic activities); • documentation and information requests to other bodies (eg, banks, which cannot oppose bank secrecy) or third parties (eg, notaries). Moreover, more intrusive actions, which are gener - ally permitted in the context of criminal investigations, such as searches and seizures, may be performed only under the authority of the public prosecutor. Taxpayers’ specific rights and guarantees during tax audits are mainly set out in Law No 212/2000.
assets and investments held abroad during the rel - evant tax period that may give rise to taxable income in Italy. Under certain conditions, the reporting obligation also applies to Italian residents who are “beneficial own - ers” of assets and rights held abroad, even if formally owned by other persons (eg, trusts, foundations and similar arrangements). Assets to be reported include: • participations in non-Italian entities; • units of non-Italian funds; • foreign currencies; • crypto-assets; • deposits and bank accounts; • financial and derivative contracts with non-Italian counterparties (eg, loans, repo agreements); • insurance policies with non-Italian insurance com - panies; • stock options issued by non-Italian companies; • yachts and other vehicles subject to registration in foreign public registers; and • valuables and works of art held outside Italy. Tax Monitoring of Financial Intermediaries Under Article 1 of Legislative Decree No 167/1990, banks, financial intermediaries and other financial operators must report to the Italian Revenue Agency any transfers of money to and from abroad with a value of at least EUR5,000. This reporting obligation also applies to transactions involving crypto assets. DAC6 Directive Italy has implemented Directive (EU) 2018/822 (DAC6) through Legislative Decree No 100/2020. DAC 6 Directive provides for the automatic exchange of information on certain cross-border arrangements within the European Union and between Member States and third countries. The obligation to report relevant cross-border arrangements to the Italian Revenue Agency lies on the intermediaries that design or promote a reportable arrangement and, ultimately, on the relevant taxpay - ers.
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