SWITZERLAND AND ITALY REACH AN UNDERSTANDING: SWITZERLAND WILL BE TAKEN OFF THE ITALIAN BLACK LIST

On April 20, 2023, Federal Councillor Karin Keller-Sutter and Italian Finance Minister Giancarlo Giorgetti signed a political declaration concerning Switzerland's removal from the Italian black list under the Ministerial Decree of May 4, 1999.

An agreement this to be welcomed. The benefits, in fact, are undoubtedly significant. First and foremost, the burden of proof regarding the actual tax residence of Italian citizens transferred to Switzerland under Article 2 paragraph 2-bis of the Italian Income Tax Act will be lifted. In the future, the burden of proof will be properly assigned to the Internal Revenue Service, which will have to prove firsthand the fictitious nature of an Italian citizen's residence in Switzerland.

Second, the presumption of tax evasion for financial assets held in Switzerland under Article 12 paragraph 2 of Decree Law 78/2009 will no longer operate, nor will the doubling of penalties and ordinary assessment deadlines. In fact, for the assessment of "blacklisted income," the Internal Revenue Service has 10 years in the case of an unfaithful declaration and 14 years in the case of an omitted tax declaration. With Switzerland's departure from the black list, the Internal Revenue Service will have to apply the ordinary assessment rules.

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