PRLog (Press Release) – Mar. 5, 2014 – SUNNYVALE, Calif. — The Italian government recently introduced legislation ordering all banks to withhold 20% on certain inbound wire transfers. The inbound wire transfers affected include income earned from foreign investments,financial gains, interest, dividends and certain other incomes, made into personal bank accounts in Italy. Although the new practice is effective from 1 February 2014,the withholding requirements will not apply until 1 July 2014 as the Tax Agency has recently delayed the implementation date, reports Nair & Co. International Tax Team.
The new regulation states that withholding payments would be due on a monthly basis. These withheld sums will offset the amount due on the concerned taxpayers’ annual tax returns.
Significant aspects of the new regulations are as follows:
* On behalf of the tax payers, Agenzia will receive the tax withheld by the bank.
* Tax will be withheld on overseas income earned through investments, interest, dividends, other financial assets, etc.
* Salary and money transferred as capital rather than income will be exempted (evidence must be submitted).
* In order to claim exemption, it is necessary for the taxpayer to submit “autocertificazione” – self-declaration to his/her bank. Declaration should clearly state that the income source is not from financial assets held overseas.
* Employees are responsible for obtaining and submitting all required documentation to their banks for the exemption to apply to salary transfers.
* Employers are exempt from compliance under this new regulation. However, they should be mindful to inform employees of wire transfers or other monetary payments that originate from international locations.
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