Agreement reached on Swiss-Italian tax issues

Switzerland and Italy have reached an agreement in principle on future cooperation in tax matters. Negotiations with Italy over untaxed Italian assets in Swiss banks have been running for two and a half years.

The agreement will facilitate the processing of the Italian voluntary disclosure programme recently adopted by Italy’s parliament and will “considerably increase legal certainty for Italian taxpayers” who have an account in Switzerland, the Swiss foreign ministry said.

It is the latest step towards the gradual implementation of global rules on the automatic exchange of tax information by Switzerland, foreseen from 2018.

The two governments are currently preparing the signature of a Protocol of Amendment to the existing double taxation agreement (DTA), as well as a roadmap with parameters.

Both documents should be signed before the deadline of March 2 set for Italy’s voluntary disclosure programme.

The roadmap contains a clear political commitment to several aspects of bilateral relations in the area of taxation and finance. It will be published at the time of the signing of the Protocol of Amendment to the DTA.

For foreign clients of Swiss banks whose assets are untaxed, the race is on to declare their funds with their home authorities. In the last few years, and particularly months, Swiss banks have been telling clients to either sort out their tax situation or withdraw their money.

“After years of controversy, this agreement between Switzerland and Italy is laying new foundations that will make it possible to strengthen cooperation, improve relations between the two countries and develop bilateral economic relations in a constructive atmosphere,” the finance ministry said.