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"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 - 15:02 | 4442495 Spungo
Spungo's picture

Why would they discourage money from ENTERING the country? That doesn't even make sense.

Sun, 02/16/2014 - 15:59 | 4442624 logicalman
logicalman's picture

Likely the 'geniuses' in Italian politics didn't think anything through.

They didn't see the consequences, only the potential take.

Don't ever expect a politician to make sense.

Sun, 02/16/2014 - 23:13 | 4443934 Escapedgoat
Escapedgoat's picture

It does .

They want to wreck the Italian  ECONOMY

Sun, 02/16/2014 - 16:13 | 4442661 jefferson32
jefferson32's picture

Had anyone seen my comment (following an unrelated post) about my being stopped, for the past few weeks, every single time I drive out of Italy (I do so 10+ times a month) by Guardia di Finanza officers?

http://www.zerohedge.com/news/2014-02-06/state-department-confirms-authe...

Now we know it is not just an anecdote.

Sun, 02/16/2014 - 16:49 | 4442752 Yen Cross
Yen Cross's picture

      The Italians could learn much from the Mexican drug cartels. The Spanish <> Italian language barrier is very small.

Sun, 02/16/2014 - 17:59 | 4442930 css1971
css1971's picture

Learn to Paramotor.

Sun, 02/16/2014 - 18:14 | 4442979 smacker
smacker's picture

Well, Switzerland is not in the EU, else they'd be violating the Single Market Treaty.

In the UK, it is not uncommon for travellers to be stopped and interrogated by plain clothes police between the boarding gate and the actual plane when leaving the country to a non-EU country. Looking for large sums of cash, PMs and other valuables.

And I hear that motorists between Germany-Switz are also subject to being stopped.

Sun, 02/16/2014 - 23:11 | 4443928 Escapedgoat
Escapedgoat's picture

I was also stopped at two differnt locations and asked if I was carrying any cash and if there was lots of it, ...............the cheek of it.

My answer was........... POSITIVE WITH LOTS OF CASH,

Q. HOW MUCH??????????????

A. .........17.35 Euros and all in cash. Yes Sir  (To me was an awfull lot of money LOL)

To conclude I had him there 35 minutes for APSOLUTELY NOTHING at all (It is called WASTING the suckers TIME)

 

Sun, 02/16/2014 - 16:30 | 4442697 Black Forest
Black Forest's picture

Forza Italia!!

Sun, 02/16/2014 - 16:44 | 4442734 Debugas
Debugas's picture

transfer money to your wife card - get taxed

Sun, 02/16/2014 - 16:48 | 4442751 williambanzai7
williambanzai7's picture

As they say in Brooklyn: guilty until proven not Italian...

Sun, 02/16/2014 - 17:39 | 4442865 lakecity55
lakecity55's picture

If they confiscate pensions, I hope the Italians take up Picth Forks and storm the national assembly; actually, it would be great to see all the EuroPeople take up pitchforks!!

"Hans, Brussells iss on fire!!"
"Ja, Siegfried, ze banksters are on ze run!"

Sun, 02/16/2014 - 17:58 | 4442925 css1971
css1971's picture

They never "confiscate".

They will "invest in the nation's bonds" for your safety and benefit.

 

Sun, 02/16/2014 - 17:41 | 4442873 Sufiy
Sufiy's picture

Totally unrelated:


Lithium Catalyst: Apple Electric iCar Coming From Tesla?


   It will not take much to ignite Lithium Bull again - just four words will do: China, Pollution, Tesla and Apple. We have written extensively about three of them before and now we can have the groundbreaking development with Apple joining the Electric Party. 

http://sufiy.blogspot.co.uk/2014/02/lithium-catalyst-apple-electric-icar...

Apple's M&A chief reportedly met with Tesla CEO Elon Musk

Sun, 02/16/2014 - 17:50 | 4442884 falak pema
falak pema's picture

Just to get things in focus : WHat the States do today is a result of what private corporations did YESTERDAY.

And here is a sample of that : Les 1 500 filiales « offshore » des entreprises du CAC 40

And this is JUSt France ; 1548 subsidiaries offshore for the top 40 french corporations. I KNOW the government knee jerks on individuals instead of going after the corporates; And you know why !

There is NOT enuff of this going on : 

Banques françaises : pourquoi elles sont en bonne santé, mais inquiètes

Sun, 02/16/2014 - 18:16 | 4442984 Herdee
Herdee's picture

It's obvious in Italy and elsewhere in Europe that news reports of open corruption have reached the maximum limit.Time for Government to finally tax the Mafia.Crooks must pay their fair share too.Good way to make money off of organised crime.

Sun, 02/16/2014 - 18:26 | 4443015 stevegee58
stevegee58's picture

Europe is "fixed?"  Sounds like when my doge got "fixed."

Sun, 02/16/2014 - 18:41 | 4443050 gann1212
gann1212's picture

the italian government is YOUR friend. anyone who disagrees will immediately be brought outside and shot and 20%, no make that 50%, aw what the hell 100% of their assests will be confiscated by the italian government until the family can prove that they are not compensation for work done or some such thing. there its all better now

Sun, 02/16/2014 - 19:41 | 4443240 Rising Sun
Rising Sun's picture

Fucking hilarious!!!!!

 

But hey, fucking fat slob mafia pigs, they`re doing just fine.

Mon, 02/17/2014 - 02:30 | 4444313 nathan1234
nathan1234's picture

The Italian Government is now theMother of All the Italian Mafias.

 

Mon, 02/17/2014 - 03:39 | 4444384 JailBanksters
JailBanksters's picture

Seems fair

The people that didn't cause the crisis should pay tax to the very people that did cause the crisis so they can fix the problem they created.

Seems fair to me.


Mon, 02/17/2014 - 17:11 | 4445661 steelrules
steelrules's picture

The communists did this back in the 60's - 70's, if you brought western currency  into a communist block country you had to declare it,  they would give you what they thought was a proper exchange, needless to say what you got was less than 1/2 the buying power that you came with.

Wed, 02/26/2014 - 17:53 | 4482132 solnushka
solnushka's picture

Hi

This might be a bit off the thread, but if you've got an interest in anti-money laundering then this short explainer video might be of interest http://youtu.be/KIRrld4TGZ0

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