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Advance tax ruling program has resulted in €4 bn new investments so far

by Marco Mobili & Gianni Trovati

The Italian Revenue Agency’s “advance tax ruling” program , which enables large companies that want to make new investments in Italy to obtain an preventative opinion on its tax treatment, has resulted in €4 billion in new investments and 76,000 new jobs, said Italian Revenue Agency Director Rossella Orlandi at a technical seminar yesterday.

So far this tool has produced ten “agreements” with similarly large companies, most of which are foreign (6 out of 10), but other studies are underway and the number will soon increase, she said.

This is the result so far of the “new forms of advanced dialogue between the Revenue Agency and companies,” said Orlandi at the seminar, which was held at the Economy Ministry.

“The businesses need assurances before they make investments,” she explained.

Other key results in the “Revenue Agency for growth” program are those delivered by the Cooperative Compliance Program —the so-called ‘second pillar'—which aims to prevent tax litigation. It calls for an agreed-upon definition of a company’s taxable income (based upon the examples of the Netherlands and the United States) designed to keep businesses that earn more than €10 billion from receiving any ‘surprises': the Revenue Agency has already sealed five deals (the first of which was with the Ferrero group ), and their offices are working on five more cases.

The third pillar is the Individual Savings Plan, which was created to direct Italians' savings into Italian mid-cap companies (those found on the AIM market) by developing alternative forms of financing at the banks. Minister of the Economy Pier Carlo Padoan has vindicated the “extraordinary and unforeseen results,” and his enthusiasm is based on the first, partial figures that show more than €1.5 billion gathered in just a few months—and just from the main financial market participants.

Important promises have also been made by the Patent Box, namely fiscal subsidies for intangible assets, in spite of the initial operational difficulties and the recent decision to exclude the value of brands; thus, they are concentrating on the implementation of patents and software.

The Revenue Agency, as Orlandi explains, has signed 15 deals with large groups, and once again they are currently working on others as well.

But the watchword “compliance,” which emphasizes preemptive deals rather than ex-post verifications, is also reaching the ears of smaller companies. For them, “compliance for the little guy” works mainly through letters, most of which are digitally, which warn individual taxpayers about any anomalies in their declarations and payments to the Revenue Agency: last year, the Agency sent a total of 533,000 letters, and in 72% of cases the recipients complied—this brought in an addition €500 million. They have already sent 191,000 letters this year, addressed to the VAT numbers that have either failed to declare or only sent incomplete declarations.


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