On March 2, Monaco and Italy signed a tax information exchange agreement (TIEA) based on the latest model agreement from the Organisation for Economic Co-operation and Development (OECD) and the treaties Italy has recently concluded with Switzerland and Liechtenstein.
Signed by Italy’s Ambassador to Monaco, Antonio Morabito, and Monaco’s Minister for Foreign Affairs and Cooperation, Gilles Tonelli, the TIEA and an accompanying protocol will be effective after the completion of domestic ratification procedures by both territories. It will cover accounts that are open on the date the agreement was signed.
The TIEA provides for the automatic exchange of tax information on request, and an accompanying protocol also allows group requests providing there is evidence that tax is at risk.
Following the signing of the TIEA, it has been agreed that Monaco has adequate information exchange arrangements in place with Italy to be taken off the Italian “black list.” As a result, Italians with undeclared assets in Monaco will now be allowed to enter into Italy’s current voluntary disclosure program, which allows Italian residents to regularize undeclared capital held abroad and access penalty concessions.
Those wishing to be included in the program must file an application by September 30, 2015. Participants have to pay all outstanding taxes. However, the taxpayer will be subject to much-reduced administrative and criminal penalties and will generally be free from criminal prosecution.
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