Well, very simply it is a fact that 300,000 letters were recently sent by the Spanish tax authorities ( The Hacienda), to expats living in Spain. Each expat was listed with the land registry as having a permanent residence in Spain. The only issue is that the Hacienda could not find any record of a tax declaration of income.
So, it might be natural that the Hacienda would question how someone could afford to live in Spain, probably with a registered car as well, but not have any declared taxable income.
The relevance to Italy is that there are lots of expats with residences in Italy who either don't declare any income because they choose not to, or they are paying taxes on their income and assets in their country of origin with the assumption that they do not need to make a declaration to the Agenzia delle Entrate as well. The former case is blatantly tax evasion (whether intended or not), the unfortunate fact is that for Italian purposes the latter is deemed to be the same.
If you have foreign earned income, either pension, employment, or investment income and taxes are paid in the country of origin, BUT you are a resident of Italy (you spend more than 186 days in the country each year), then a tax declaration MUST be made. Under any Double Tax Treaty that may exist with the home country, Italy may provide a tax credit for the tax you have already paid.
If a declaration is not made, then it is deemed tax evasion and stiff penalties can apply, in some cases up to the value of the non declared assets.
Monti is determined to clamp down on ta evasion in Italy. Ferrari owners in Cortina may be one target, but wealthy expat home owners in Tuscany, Umbria or elsewhere may equally become a target.
If you would like to know more about how to invest tax efficiently in Italy then go to the following post:
Tax Efficient Investing for Expats in Italy
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