Survival of the Richest

Italy
“After our meeting in Milan last November
and the excellent agreement on tax
contingencies between Apple and the
government, Tim Cook will be here and we
will talk again tomorrow.”
Prime Minister Matteo Renzi
On the eve of his meeting with Tim Cook (CEO, Apple
Inc.) held in Rome on 22 January 2016 471
Overview
The Panama Papers scandal had strong links to Italy. The
Italian names published by L’Espresso, the national outlet
cooperating with the International Consortium of Investigative
Journalists, ranged from former PM Silvio Berlusconi and
former Member of the Senate Nicola di Girolamo to highlevel
corporate leaders, TV presenters, actors and Formula
1 drivers, among others. 472 The Italian bank UBI Banca was
also highlighted due to its role in setting up shell companies
through its subsidiary in Luxembourg, a number of which
were still active when the Panama Papers were published. 473
The Government announced a major fiscal inquiry 474 while the
prosecutor’s office in Turin opened a formal investigation for
alleged money laundering. 475
The subsidiaries of big international corporations operating
in Italy have been under reinforced scrutiny by the Italian
judiciary and fiscal authorities. In late December 2015, Apple
Italy sealed a deal with the Italian Revenue Agency (IRA),
settling the payment of €318 million out of the alleged €880
million of avoided corporate taxes between 2008 and 2013. 476
An Italian investigation is also ongoing into Credit Suisse Ag.
The Switzerland-based group’s parent company is charged
with systematically having helped 13,000 Italian clients
to hide their assets of more than €14 billion abroad. 477
In December 2014, the fiscal police discovered internal
documentation with strict instructions to bank officials on
how to circumvent controls and escape the inquiries. The
documentation was nicknamed the ‘manual of a perfect
tax-dodger and money launderer’ by the prosecutor’s
functionaries. 478 In October 2016, Credit Suisse Ag agreed
to pay €100 million to the Italian tax authorities to settle the
legal dispute. 479
The investigations into corporate tax practices by foreign
multinational corporations gives an impression that Italy
is keen to crack down on corporate tax dodging. However,
at the same time, harmful tax practices in Italy (see below)
give reason for concern. Italy has, however, previously
shown support for the European Commission’s proposal to
adopt a Common Consolidated Corporate Tax Base under
the EU. 480 As explained above (under ’Common Consolidated
Corporate Tax Base), this is a proposal which could, if
designed correctly, be an important step towards removing
harmful tax practices in the EU. Italy has not yet responded
to the concrete proposal from the European Commission,
which was launched in October 2016. 481
Transparency
Public country by country reporting
Italy has, in accordance with EU legal requirements,
introduced public country by country reporting (CBCR) for
the financial industry. 482 Non-public CBCR for multinational
corporations which are based in Italy and have a turnover of
minimum €750 million was introduced in the finance bill in
December 2015, and the Italian Ministry of Finance aims to
publish the corresponding decree by the end of 2016. 483
During the Anti-Corruption Summit in London in May 2016,
Italy committed to supporting the development of “a global
commitment for public country-by-country reporting on tax
information for large multinational enterprises”. 484 However,
it is not clear what concrete actions will follow, if any. As
regards the European Commission’s proposal to require
big multinational companies (with a turnover of more than
€750 million) to publish country by country reports on
their activities in the EU and in so called “non-cooperative”
jurisdictions, the position of the Italian government is unclear.
The government has expressed concerns that the requirement
of public disclosure might impact negatively on the ongoing
OECD process of including more countries in the non-public
exchange of information on country by country reports. 485
Survival of the Richest • 73