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76 • Fifty Shades of Tax Dodging In 2015, Italy has not negotiated any treaties with developing countries, but have finalised a treaty with Hong Kong, a jurisdiction known for its problematic role in facilitating tax planning. 769 Financial and corporate transparency Italy received the Swissleaks list of account holders in 2010 and has since been cracking down on tax evaders and banking secrecy. In 2015 the Supreme Court upheld that the revenue authority could use the Swissleaks list in its investigation. 770 Italy has made a strong effort in 2015 to sign information exchange agreements with a number of jurisdictions known for banking secrecy or for facilitating aggressive tax planning. This includes an agreement with Switzerland signed in February 2015 for the automatic exchange of tax information starting from 2018. 771 This agreement followed the public pressure on the heels of the SwissLeaks scandal. Public reporting for multinational corporations The Italian government’s position on country by country reporting for all sectors is not yet clear as no public statements or legislative proposals have made clear whether the government intends to follow the OECD BEPS recommendations, or whether they will implement a more ambitious public reporting requirement. The Capital Requirements Directive IV, which contains a public country by country reporting requirement for the financial sector, was finally fully adopted into Italian law in May 2015. 772 Despite this, the Italian Central Bank has already issued guidelines for the financial sector since the end of 2013 on how to implement the country by country reporting provisions of the directive. 773 A specific consultation on the implementation of article 89, which contains the country by country reporting provision, was held in mid-2014. 774 The text of article 89 has been fully inserted in Italian law without relevant modifications. 775 In early 2015 several Italian banks – including some of the major ones – and several financial intermediaries publicly disclosed on their website country by country reporting data, including income, profits and tax paid – while nothing got reported on public subsidies received. The published data was often in open and workable formats (such as .xls). 776 Ownership transparency The Bank of Italy released a stern warning in mid-2015 that money laundering and tax evasion were widening, with the number of suspicious bank transactions monitored in 2014 at 71,700. This was up by nearly 7,000 from 2013 and nearly seven times more than reported in 2007. 777 The concealment of the real owners of laundered money is key for criminal activity to flourish, which is why the issue of beneficial ownership transparency has strong relevance for the Italian economy. Since the mid-1990s, Italy has had a publicly accessible register of companies. 778 According to the Italian civil code, information in the public register is checked by a judge appointed by the provincial court. 779 In general terms, the Italian government has previously supported the establishment of public and centralised registers of beneficial ownership information as a tool to fight tax avoidance. 780 However, the recent compromised agreement in the antimoney laundering directive at the European level seems to have softened the government’s position in this regard. Today the government is committed to a quick implementation of the directive, possibly by the end of the year or early 2016. However, it does not intend to move beyond the compromise text reached in the European negotiations, which requests to make central registers accessible just to stakeholders with a “legitimate interest”. 781 Based on a preliminary interpretation of the new directive, the government would recognise as having a legitimate interest those entities that have in their statute or mandate the fight against money laundering, corruption and tax avoidance, as well as journalists and media with an extensive track record of investigating these matters, and possibly economic actors engaged in direct relationships with those specific companies being screened. 782 It is still unclear how the legal construct of the legitimate interest definition will be inserted in the text of the implemented directive in order to match existing jurisprudence in the country.
Fifty Shades of Tax Dodging • 77 EU solutions The appointment of former Luxembourg Prime Minister Jean-Claude Juncker as head of the European Commission received a lot of media attention in Italy. 783 In the second semester of 2014, Italy held the rotating presidency of the EU and in that period led negotiations on behalf of the European Council on the revision of the anti-money laundering directive, including significant tax-related provisions. Tense negotiations prompted the Italian government to back down in the end and to accept restrictions on the public’s access to registers of beneficial owners of companies and no access to information on trust owners. At the same time the Italian government did not take any specific public position on investigations by the European Commission on state aid related to transfer pricing arrangements, despite one of the cases involving the Italian car-maker Fiat in Luxembourg. 784 As a response to the LuxLeaks scandal, at the end of November 2014 the Italian Finance Minister, together with his colleagues from France and Germany, wrote to the Commissioner for taxation calling for “common, binding rules on corporate taxation to curb tax competition and fight aggressive tax planning” at the EU level. 785 Conclusion Significant changes have taken place in Italian tax policies over the last 12 months. Several developments are quite troubling because they will allow more tax incentives for multinational companies operating in Italy, not least through the newly adopted patent box. This raises deep concerns about the Italian government’s commitment to fighting tax dodging in an effective manner. While new European directives have been implemented into the Italian law – including new requirements on the disclosure of beneficial ownership of companies and country by country reporting by multinational companies in the financial sector – Italy tends to follow international consensus around OECD BEPS. It has not advanced any further improvements of the legislation, in particular on public country by country reporting and tax rulings. Disappointingly the Italian government has shown very little interest in connecting the tax matter with development and resists the establishment of a more effective body on tax matters under the auspices of the UN. Global solutions The Italian government kept a low profile concerning the July 2015 UN Financing for Development conference, in particular as concerns taxation issues. More specifically, the Italian government has always supported the OECD’s Global Forum process on tax and development as an important way to include developing countries in the OECD-led work on this matter and has been critical of the strengthening of a UN tax committee on taxation matters. 786 More generally, the strategic guidelines for international development cooperation of Italy in 2013-2015 do not include any reference to tax and development issues and little attention is paid to domestic resource mobilisation. 787 The Italian government is strongly supportive of the OECD BEPS process and reports that it is satisfied overall with its outcomes so far. 788
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