While the propaganda surrounding Europe's "recovery" has reached
deafening levels, what is going on behind the scenes is quite the opposite, and
in the latest example that Europe is increasingly formalizing a regime of
implicit capital controls, we learn that Italy has just ordered banks to
withhold a 20% tax on all inbound wire transfers: a decree which on to of
everything will apply retroactively to February 1. As Il Sole reports, "the deductions will be automatic (unless prior
request for exclusion), and then it will be up to the taxpayer to prove that the
money is not in the nature of compensation "income." In other words, as of this
moment, but really starting two weeks ago, all Italians are money launderers
unless proven innocent.
Some more details on Italy's latest decision to limit capital flows
into the country, Google translated:
... the collection is the result of the decision to consider any transfer from abroad and directed to an individual Italian, as a component of taxable income, subject to proof to the contrary, which must be date the taxpayer receives the sum on your account. However, the first payments to the Treasury by intermediaries (mainly banks) will be performed July 16, so that the deemed payment accrued from February 1 until June 30 (and therefore set aside and with interest). Next, you will pay the withholding every 16th of the month following the effective perception of the sum. In fact, all taxpayers who receive a transfer from abroad on their personal account - and not professional or business - will be applied to the deduction, as an advance which will then be computed in the annual tax return.
What Italy appears to be focusing on are direct income payments
where individuals get compensation via bank transfer. Of course, since the tax
is superceding, good luck to any Italian citizen explaining the origin of every
inbound money transfer and it is in accordance with the law. `
It is, therefore, a real "held" that will not be applied only in the case where the taxpayer proves that the amount received or quenched and does not have a connotation income but only and exclusively sheet: for example, the transfer incoming could be a return of a loan made in the past, or the return of a deposit, the date for the conduct of a house leased abroad.
Reasoning aside, what Italy just did is enforce a "shotgun"
withholding tax on all inbound money:
The mechanism that provides a primary role to the bank official that is to receive the declaration of the taxpayer and evaluate it. In any case, you make the deduction or not, the name of the recipient will be reported by the bank Revenue Agency. And the taxpayer has until February 28 of the year following the year of the deduction to attest to the improper application of withholding tax to the bank and ask for a refund.
Even Il Sole admits that the new tax is so ad hoc that confusion
will surely follow:
As is apparent from the wording of the measure, there is not even a standard for the development of self but, certainly, there will be a "balancing" between assets and funds held abroad (the RW of the UNICO) and income flows in entry: in short, it is likely that the intermediary in addition to the self-certification may require a taxable person to the performance of the RW framework from which we must infer what good has originated the incoming cash flow.
Of course, what will end up happening, is that more Italians-
especially the wealthiest ones - will open bank accounts either in other
Eurozone nations that have not established such a draconian wire transfer
regime, or - more realistically - in such New Normal tax havens as Singapore now
that Switzerland's main business model for centuries has been destroyed. The end
result will be even less capital inflows into Italy - just the opposite of what
the desperate Italian government is trying to achieve. But that is a concern for
the next Italian government and the one promptly replacing it. For the time
being, let's all pretend Europe is fixed, even as it prepares for the nuclear
option: the confiscation of retirement savings.
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