How undeclared funds are legalised using Italy’s Golden Visa Programme

Italy is the largest country in Europe suffering major economic and fiscal problems. Meagre growth, troubled banks and enormous debts have made Finance Minister Pier Carlo Padoan turn to “creative” solutions.

A new flat-rate tax is attracting droves of wealthy foreigners that take advantage of Italy’s new Golden Visa Programme. The Italian authorities are not asking any inconvenient questions about assets in foreign countries. Nobody cares about it. Undeclared funds can be legalised easily and with immediate effect by simply paying the new flat-rate tax. All it takes to settle the entire tax bill for foreign-source income is a one-off flat-tax payment of EUR 100,000.

“Wealthy foreigners establishing residence in Italy are not required to disclose their foreign assets. Nobody cares about it in Italy.“

Foreigners are offered a very swift and convenient process, they are not questioned personally, as is the case in Switzerland’s flat-rate tax system. It only takes a few weeks to be issued with an international tax number, which is what all bankers ask for in the age of the automatic exchange of information. The effect is that all assets located in a foreign country are legalised immediately, including bank accounts in Switzerland holding undeclared funds.

How much income is needed to make the programme worthwhile?

A flat-rate tax of EUR 100,000 appears to be a lot of money on first glance. But it’s not. Those earning EUR 300,000 and more in one of Europe’s high-tax countries can quickly end up paying a 40% tax rate. This would amount to EUR 120,000 in income tax payable, which is already EUR 20,000 more than Italy’s flat-rate tax of EUR 100,000 would cost them. The Golden Visa Programme allows income millionaires to save massive amounts of taxes.

How are the undeclared funds legalised?

In Italy, the ordinary disclosure requirements for assets in a foreign country are complicated and time-consuming. They have to be reported meticulously using the dedicated form “RW Doppio”. My Italian partners, my “Commercialisti”, were close to giving up on trying to decipher the Italian process for making a voluntary self-disclosure using the RW Doppio form due to the complexity in the reporting obligations for bank accounts in Switzerland holding undeclared funds.

Luckily, the law on the Golden Visa Programme explicitly abolished the “RW Doppio” form. Under no circumstances are wealthy foreigners, who are committed to the Italian way of life and who want to wipe the slate clean in terms of undeclared funds, to be hassled with red tape when applying for the Golden Visa Programme.

I contacted the Director of the Italian tax authority ‘Agenzia delle Entrate‘, Mrs. Gabriella Lusi, who confirmed to me personally that the authority does not want to know about any undeclared funds sitting in the bank accounts of wealthy foreigners.

A Russian national with undeclared funds in Switzerland who transfers his residency to Italy under the Golden Visa Programme can rest assured that the Italian tax authority will not inform the Russian tax authority about his Swiss bank accounts, simply because nobody in Italy has any interest in them. Italy currently has other problems to tend to.

The Automatic Exchange of Information (AEI) between Switzerland and Italy is the earliest point at which Italy will learn about the existence of money in Switzerland, but by that time the funds have already been legalised. Who is to say today whether the automatic exchange of information will work as smoothly as envisaged by the OECD?

Advantages of the “flat-tax Italy”

When compared with the Golden Visa Programmes offered by Portugal, Spain, Malta and Cyprus, the Italian Golden Visa Programme offers some unique advantages:

  • One of them is that it allows an extended group of family members, such as a brother, father-in- law or cousin of the applicant, to also be granted Italian residency against payment of an additional fee of only EUR 25,000.
  • The programme does not require wealth in the double-digit millions to be evidenced, as is the case for those wishing to benefit of Switzerland’s flat-tax programme.
  • There is no inheritance or gift tax for assets located outside of Italy. Taxation hardly comes with a smaller price tag. Berlin is of course enraged about Italy’s “tax dumping”. The tax dumping by Italy is purported as a negative development for all European countries. “Italy would be well advised to drop this nonsense”, states Markus Feber, a finance expert and MP for the
    conservative CSU.
  • The international tax number is usually issued within 2 to 3 weeks. It enables the applicant to instantly legalise all accounts with undeclared funds. He also has the certainty of knowing that Italy cannot inform the authorities at his previous residence, as it stated that it does not want to be informed about
    assets in a foreign country.
  • The Italian Golden Visa Programme even provides for a “tax ruling”. Applicants can use the ruling prior to submitting the official application to make a binding request to the “Agenzia delle Entrate” for making a final determination about any remaining doubts concerning specific issues. The applicant will be issued with a legally binding written advice. The applicant
    can then use this binding written commitment issued by the tax authority to protect himself against any future changes in the Italian law.
  • He remains entitled to the tax benefits for a term of 15 years. and can become a naturalised Italian citizen in this period. Italy’s passport is among the highest rated passports worldwide.

Further information on the Italian Golden Visa Programme are available for download free of charge here.

Bankers and wealth advisers with foreign clients that may be interested in the Golden Visa Programme will quickly find informative YouTube clips in English, Arab and Chinese they can forward to their clients.

The Russian community in Forte dei Marmi (Tuscany, Italy) has attracted many new residents in the past months, thanks to the new flat-rate tax. Forte dei Marmi has
already made preparations for the new Russian residents.

A large Chinese community that made Prato their new home is also experiencing rapid growth. Australia used to be the destination of choice for Chinese immigrants.
More and more are now choosing Italy as their new home. As the immigration criteria have become more stringent in Australia, making it virtually impossible to obtain an
Australian permanent residency visa, Chinese relocation agencies have discovered the Italian Golden Visa Programme and asked for assistance.

Over the last five years, the relocation market with products like Golden Visa and Citizenship-by- Investment programmes has developed into a gigantic market. Families and global citizens have become more inclined to relocate their residence and to purchase passports that allow for easier and more convenient travelling.

Despite strong criticism from the German Federal Government in Berlin, which is accusing Italy of tax dumping and endangering all other OECD countries, Golden Visa Programmes are here to stay because they are the manifestation of a strong international trend. The reasons behind that are manifold. Asset protection and international tax optimisation are only a few of the many goods reasons why global citizens are taking advantage of these kind of services.

The Italian Flat Tax fiscal regime is tailor-made to the needs of a nomad capitalist with international business looking for tax-efficient solutions and asset protection.

If you are interested to discuss all the options you have with the Italian Flat Tax, do not hesitate and give me a call now on my private number:
+41 79 543 85 93 or, write me online or by email to my private email address:

Enzo Caputo
Caputo & Partners AG