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Voluntary disclosure

Voluntary disclosure bis: still few applications filed

Alessandro Dragonetti Alessandro Dragonetti

Alessandro Dragonetti, Co-managing partner and Head of Tax at Bernoni Grant Thornton, wrote about the voluntary disclosure-bis procedure in an article published on PRIVATE magazine.

The deadline for the filing of applications for the voluntary disclosure-bis procedure – which allows taxpayers to regularize their situation with the Inland Revenue and to repatriate undeclared capital – gets closer, but the number of applications is still too low. While the Inland Revenue collected 4 billion Euros in the previous edition, the Revenue Office estimates to collect 1.6 billion Euros this time. And, considering that 60 billion Euros were repatriated in the last edition, a considerably lower amount is expected this time.

Unfortunately, the voluntary disclosure-bis procedure seems not to be so exhaustive and presents various hindrances and pitfalls. The main hindrance discouraging taxpayers is cash, including cash deposited both in foreign bank accounts and in safe-deposit boxes. In fact, the need to explain and prove where money comes from represents a strong deterrent to the application, as it is sometimes impossible to prove to the Revenue Office where paid-in cash during the period (2010-2015) comes from. Also, taxpayers believe that they can choose whether to apply for the voluntary disclosure-bis or resort to alternative solutions. Actually, there are no alternatives, as no other instrument has the same characteristics and advantages of voluntary disclosure.

More generally, in order to recover undeclared capital, those taxpayers who still do not trust the Tax Authorities must be stimulated to apply for the voluntary disclosure-bis and regularize their position.