"Money Launderer Until Proven Innocent" - Italy Imposes 20% Tax Withholding On All Inbound Money Transfers

Tyler Durden's picture


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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Sun, 02/16/2014 - 12:46 | 4442159 TBT or not TBT
TBT or not TBT's picture

That's a good assumption, because governments in Italy have been levying more taxes than it is possible to pay, for so long, that it is a part of their way of being.

Sun, 02/16/2014 - 12:56 | 4442176 JackT
JackT's picture

Why stop at 20%? They should go halvsies - seems only fair.

Sun, 02/16/2014 - 13:00 | 4442192 TBT or not TBT
TBT or not TBT's picture

They're already there, domestically, and not collecting that successfully, thus this sort of thing. They banned cash transactions over x amount a few years ago already to give them more tools for catching the people at their little survival games, and x is a low amount.

Sun, 02/16/2014 - 13:22 | 4442244 Troll Magnet
Troll Magnet's picture

Looks to me like it's high time for 'Murikka to spread some freedom in Italy with our tanks and drones.

Mr. Nobel Peace Prize Winner, get to work!

Sun, 02/16/2014 - 13:24 | 4442252 DaddyO
DaddyO's picture

Just remember, he who gets to make the rules, gets all the gold...just sayin.


Sun, 02/16/2014 - 13:30 | 4442261 semperfidelis
Sun, 02/16/2014 - 13:37 | 4442278 graneros
graneros's picture

It will probably do well for bitcoin.  I'm sure at least one ZHer is on the Fone now with his star broker buying even more.

Sun, 02/16/2014 - 14:11 | 4442345 fonestar
fonestar's picture

Thank-you for choosing and thinking of fonestar.  This should bode well for Bitcoin.  Eventually, even the thickest skulls will discover the utility for Bitcoin and how it can do many, many things their 0ldC0in cannot.

Sun, 02/16/2014 - 14:26 | 4442398 whatthecurtains
whatthecurtains's picture

Oops seems Italy is one step ahead of you.    http://www.coindesk.com/italian-amendment-treat-bitcoin-like-cash/


Italian Parliament member Sergio Boccadutri took to Twitter yesterday to reveal an amendment to a proposed law that would define bitcoin and initiate a process to recognise and regulate the cryptocurrency.

Sun, 02/16/2014 - 14:32 | 4442414 fonestar
fonestar's picture

fonestar is not denying there will be laws, regulations, taxations, outright bans on Bitcoin.  What he is saying is that these laws will be almost impossible to enforce and will be almost totally ignored.  Anyone who has actually used Bitcoin for a few weeks or months should be able to tell you why that is so.

Sun, 02/16/2014 - 14:43 | 4442431 Indian_Goldsmith
Indian_Goldsmith's picture

"taxes are good for you", they said. BTW, they cant tax gold, can they?

Sun, 02/16/2014 - 15:00 | 4442489 kaiserhoff
kaiserhoff's picture

Private sector departing from Italy at gates 1 through 156, at warp speed, in 5,4,3...

Have a nice capital flight.

fucking WOP Retards.  Free bunga bunga Dude!

Sun, 02/16/2014 - 16:52 | 4442766 macholatte
macholatte's picture




Foreign banks bracing for tough U.S. Fed capital rules



Sun, 02/16/2014 - 17:05 | 4442793 Cap Matifou
Cap Matifou's picture

In Italy there is VAT on the gold sales, at least when there is a paper trail.

Sun, 02/16/2014 - 17:22 | 4442832 ArgentoFisico
ArgentoFisico's picture

There is no vat on gold sales, there's a 20% capital gain.. but if you sell to, say, a german, and get paid via bank transfer.. FUCK! Bastards. I just wonder how long before all crumbles apart.. i fear it will take long, years

Sun, 02/16/2014 - 18:01 | 4442861 Cap Matifou
Cap Matifou's picture

OK, sorry, i knew there is some fukking tax on it.

Italian police finding one ton (or maybe just 100kg) of gold in a car

Sun, 02/16/2014 - 17:33 | 4442854 Pseudonymous
Pseudonymous's picture

You have the gold, you make the rule.

Mon, 02/17/2014 - 07:22 | 4444521 The Navigator
The Navigator's picture

Physical, Bitchez.

Try and track/tax that. Not so fucking easy, eh?

Ag/Au, the ultimate bitcoin, but physical and (historically, for  3,000 years) worth something.

Sun, 02/16/2014 - 19:14 | 4443162 Going Loco
Going Loco's picture

I upvoted you for sticking to the point over many months, which is that 90% of ZH users abhor the modern bankster system and simultaneously ignore anything (except gold and silver) which might actually help to change things.

'these laws will be almost impossible to enforce and will be almost totally ignored.' 

I just wonder how big is "almost" in this context. Cross fingers it's very small.

Sun, 02/16/2014 - 19:28 | 4443196 fonestar
fonestar's picture

fonestar suspects that in a decade's time, the term "money laundering" will be reduced to a historical curiousity.

Sun, 02/16/2014 - 14:51 | 4442463 _ConanTheLibert...
_ConanTheLibertarian_'s picture

+1 for the word play

Sun, 02/16/2014 - 14:27 | 4442401 JamesBond
JamesBond's picture

Fascism in Italiy?  

What a total surprise!  


Sun, 02/16/2014 - 20:39 | 4443404 fockewulf190
fockewulf190's picture

Sounds like the Italian government wants its cut of overseas mob profits.

Sun, 02/16/2014 - 16:55 | 4442762 TahoeBilly2012
TahoeBilly2012's picture

Longstanding plan? Zionist banks (the "chosen" ones) get endlessly bailed out while even wealthy citizens get bailed in? Interesting plan if it is one. One wonders where all this goes.....oh an along those same lines...Zero hedge care to ponder the fact the Fed Bank will soon "own" the majority of mortgages in the US?? Again, is these are plans, they are damn slick and while many see the injustice/fascism/collectivism of it all, who sees what else it really might be...

Sun, 02/16/2014 - 17:38 | 4442864 Cap Matifou
Cap Matifou's picture

At the end of the road will stand a nice gate with the inscription:

Work makes you free (from the bankster imposed debt, NOT)

Sun, 02/16/2014 - 19:23 | 4443180 Going Loco
Going Loco's picture

@TahoeBilly2012:- 'the Fed Bank will soon "own" the majority of mortgages in the US'

Oh my word!

'If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.'

You Yanks really are asleep at the watch, aren't you? Your forefathers would be ashamed of you.

Sun, 02/16/2014 - 13:29 | 4442250 layman_please
layman_please's picture

"Italy has just ordered banks to withhold a 20% tax on all inbound wire transfers"

does anyone have any more doubts about the merging of the banks and the government? this is the best example of fascism! 

who could have thought this would happen in italy?! sarc/

Sun, 02/16/2014 - 13:52 | 4442307 Excursionist
Excursionist's picture

Not sure whether this withholding tax is the best example of fascism, but the tax does remind me of a drowning victim irrationally grasping for anything to save herself, even if it's a potential rescuer about to be pulled under by the victim. 

I believe rescuers are taught that in extreme situations it's necessary to punch, immobilize, etc. the drowning victim to ensure at least one of them survives.

Dear Italians... take what you will from this analogy.

Sun, 02/16/2014 - 15:03 | 4442480 layman_please
layman_please's picture

withholding tax is obviously not fascism. diminishing border between government and banks is. governments without banks would grind to a halt if they would exist in the current state at all. what this implies is the fact the banks are now above the law as governments have always been. 

in todays world the truth is the government is just the right hand of the banks, not the other way around though in this case it seems the government dictates how commercial banks should cooperate(is there any protest from the banks?). one can be sure this favor will be returned in one way or another.

"Fascism should more properly be called corporatism because it is the merger of state and corporate power." - Benito Mussolini. 

Sun, 02/16/2014 - 15:25 | 4442546 layman_please
layman_please's picture

one can also interpret this precedent as an introduction to a new practice where 20%(insert whatever number eu technocrats see fit) of peasant's account is reserved for bank or government emergency

or: how i learned to stop worrying and love the bail-ins.

Sun, 02/16/2014 - 15:20 | 4442545 Gold Eyed Cat
Gold Eyed Cat's picture

Fun Fact!  I once watched a panicing, handicapped man take my co-worker from the surface straight down 13 feet (a super smart, and very strong ex-marine).  That's why you should always throw or reach with a pole, never make physical contact.  And if a panicing person ever grabs you, feel free to grab them back and pull them to the bottom.  They will fight through punches, but even an irrational mind will release you if they think you are trying to drown them.

You made a pretty interesting analogy there.  Too big and insane to fight off? Yep.  But absolutely guaranteed to sink if people stop holding it up... or even helped pull it down.




Sun, 02/16/2014 - 18:14 | 4442929 Pseudonymous
Pseudonymous's picture

You see the Italian government as a living person (if I get your metaphor correctly, as the drowning victim)? I don't like this particular thing about this otherwise very good metaphor . A government doesn't have anything in common with a living organizm any more than a malignant tumor does. Therefore there can not be any rational compassion for it and no will to rescue it (except maybe if you could put it in a petri dish and study it for the benefit of science).

Sun, 02/16/2014 - 16:39 | 4442721 resurger
resurger's picture

The whale rots from the head

Sun, 02/16/2014 - 13:01 | 4442195 insanelysane
insanelysane's picture

So what exactly is inbound?  I thought the EU was one big happy union so surely inbound means from outside the EU.

Of course the number of inbound transactions just went down 80%.

Sun, 02/16/2014 - 13:11 | 4442221 ParkAveFlasher
ParkAveFlasher's picture

Gold, bitchez.

Sun, 02/16/2014 - 13:50 | 4442301 CrashisOptimistic
CrashisOptimistic's picture

No.  Gold is detectable.

This is why bitcoin is the only way.  It wont xray at airports.  Simply and only that.

Sun, 02/16/2014 - 14:09 | 4442348 chemystical
chemystical's picture

in this context might you at least start using 'cc' or 'cryptocurrency' instead of misleading the reader to believe that there is only one cc and that its name is 'bitcoin'?

a particularly important request when considered with your comment "...is the only way". 

Sun, 02/16/2014 - 14:16 | 4442368 CrashisOptimistic
CrashisOptimistic's picture

Well there are isotopes of Gold that are short lived but nonetheless exist.  Or silver. 

It's not metaphorical.  It's just an accepted standard.

Sun, 02/16/2014 - 14:55 | 4442474 chemystical
chemystical's picture

"It's not metaphorical. It's just an accepted standard."

Only here, and only by some herein.  The real user community trades in multiple cc and acknowldges them each by name.  Btc has not (and in my estimation will not) reach the status of "crayola", "xerox', and "kleenex".

checkout the cc blogs and you'll see what I mean.  otoh the others do not have a following of devotees who prattle on about them 24/7. 

try coindesk.com or fonestar's beloved btc-e.com. 

if you're really a supporter a cc, then in the short run and long run you'd do it a favor by distancing and dissociating it from Btc and the shock and awe headlines.  This aint Highlander and "there can be only one" does not apply.

Sun, 02/16/2014 - 16:01 | 4442628 kaiserhoff
kaiserhoff's picture


The whole point of inbound, is so you won't catch any actual money launders, like the Pope, the Mafia, etc. who would be smuggling cash OUT of Italy to Switzerland, Monte Carlo, whatever.  Much like the French, checking for drugs on trains headed North, to Amsterdam.

Sun, 02/16/2014 - 16:45 | 4442739 sessinpo
sessinpo's picture

Anything can be taxed. CC can be taxed at point of sale. Eventually the CC has to be used for something. This applies to PMs also. The idea that certain forms of wealth or currency can't be taxed is false.

Mon, 02/17/2014 - 01:17 | 4444242 Nick Jihad
Nick Jihad's picture

In an exchange of goods or services for money, then yes, taxation is possible. But if you are simply trying to transmit purchasing power across a national border, it is difficult to tax a cryptocurrency.

Sun, 02/16/2014 - 16:36 | 4442708 resurger
resurger's picture

What if i tell you that i have a mini EMP device that can fry you hard disk?

Mon, 02/17/2014 - 03:19 | 4444356 JustUsChickensHere
JustUsChickensHere's picture

Who would rely on just one copy of their wallet(s)?   And who would rely on electronics for cold storage of their cc?  Look up 'paper wallets', and 'brain wallets' for how to really avoid a localized EMP threat like the one you mention.

Sun, 02/16/2014 - 17:11 | 4442809 Cacete de Ouro
Cacete de Ouro's picture

Gold goes inbound from Milan airport across the Swiss boarder to Lugano to the big refineries of Pamp, Valcambi and Argor-Heraeus...

Italian Financial police really need to look at this flow, and stop picking on the poor Japanese businessmen on trains with briefcases full of old UBS gold certificates

Sun, 02/16/2014 - 13:36 | 4442277 semperfidelis
semperfidelis's picture

As long as they are in Schengen this is useless. You can go to Slovenia or Croatia and get all the cash you want.

Sun, 02/16/2014 - 16:04 | 4442639 Martel
Martel's picture

Sounds very much like this rule is against EU's basic tenet of free capital flows. I could imagine this rule will be contested in Brussels.

Sun, 02/16/2014 - 13:33 | 4442268 Offthebeach
Offthebeach's picture

Tell me there isn't a hugh demand for the product/service/WTF of the type that is known as Bitcoin.
People want a safe medium of exchange so that they can trade with others without the elites whipping the skin off until you can see the white bones of our backsides.

But, they won't quit.
More and more are on to them. (Yeah you to NSA)

Sun, 02/16/2014 - 13:58 | 4442316 infiniti
infiniti's picture

Bitshit just plunged 30% in a week and people couldn't even get their money out of it, why the fuck would people move their wealth into that?

Sun, 02/16/2014 - 14:17 | 4442373 CrashisOptimistic
CrashisOptimistic's picture

Because it's the only way to be portable beyond borders. 

You see volatility and you don't like it?  What's the volatility of anything else when it's confiscated at the airport 100%?

Do NOT follow this link or you will be banned from the site!