The Italian Competent Authority (Department of Finance of the Ministry of Economy and Finance) and the Swiss Competent Authority (Federal Tax Administration) entered into an Agreement to operationalize the exchange of information for tax purposes through "group requests" according to article 27 of the Convention for the avoidance of double taxation between Italy and Switzerland. The Agreement is in effect from 2nd March 2017 and defines the operational modalities of a specific category of admissible "group requests". It constitutes a further important factor for cooperation between the two countries towards the goal of greater fiscal transparency, following the entry into force (13 July 2016) of the Protocol amending the Convention for the avoidance of double taxation between Italy and Switzerland, which has brought the exchange of information between the two countries up to the latest OECD standard.
Group requests may relate to facts and/or circumstances existing or carried out as from 23 February 2015 (date of signature of the Protocol) and shall - in line with the OECD standard – concern groups of taxpayers that are identifiable through certain patterns of behavior, with no need to include any lists of names in the request. The Agreement concerns "recalcitrant taxpayers", i.e. Italian customers who were asked by their financial institution but refused to provide sufficient evidence of tax compliance of the funds deposited with the concerned Swiss financial institutions. Group requests generate lists of names in response, which in turn may give rise to further requests for more detailed information. The Competent Authorities of the two countries intend to continue their fruitful cooperation to operationalize group requests also on closed accounts and "substantially emptied accounts" attributable to Italian customers.
The initiative is in line with the evolution of the international cooperation framework for fiscal transparency, which includes the automatic exchange of financial information for tax purposes. The automatic exchange will allow Italy to receive on an ongoing basis, starting in September 2017, nominative individual information on Italians with financial deposits in a high number of countries, including major financial centers. In this new context, the recent re-opening of the terms for Voluntary Disclosure is an important opportunity for Italian taxpayers wishing to regularize their tax position in relation to assets held abroad in violation of tax laws.