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01
Nov 2019
  • BY: italiancpafirms
  • TAG: Documents, Business, tax
  • 01 COMMENT

Italy will benefit the most from EU-US trade pact

Italy stands to be one of the countries that will benefit the most from new EU-US trade pact called the Transatlantic Trade and Investment Partnership (TTIP).

 

The TTIP is a trade deal in which Italy stands to be the “biggest potential beneficiary”, says Pascal Lamy, the former director-general of the World Trade Organization (WTO).

Italy, being the third largest exporter in the EU (after Germany and France) would benefit greatly from a free trade deal which would further unite the world’s largest economies.

Within Italy, those who stand to benefit the most are small and medium-sized companies, especially those working in sectors such as textiles, with large overseas demand and little regulatory differences between the two economic regions.

“If you look at the numbers, the production systems and export composition of Italy – especially among small and medium-sized businesses – this is good news,” Lamy said at the East Forum Conference held in Rome.

At the root of most of the controversy is closing the gaps between the regulatory restrictions between the EU and the United States. Still, decreasing non-tariff barriers is a good thing for the world economy and estimates by the European Commission say 80% of the 0.5% GDP impact of the deal is due to decreasing these restrictions.

The EU proponents of the deal have made claims that the agreement will, as most free trade agreements do, create jobs and reduce the cost of living.  At the same time, opponents argue that it’s a threat to public services and favors big corporations.

“The old narrative of job creation doesn’t work anymore,” Lamy said.  In fact, the old type of trade agreements don’t work in today’s more modern, open and global economy. This is one reason why the TTIP is focused more on easing trade, rather than on the removal of tariffs.

“Italy is certainly a country that is focused on exports,” said Paolo Gentiloni (Foreign Minister at the time).  In 2014, this was clearly evident with Italy having exports at 24.3% as a portion of GDP compared to France at 20% and Japan at only 15%.

“We are an open country, focused on trade, commerce, dialogue and cultural interaction…this characteristic is recognized nearly all over the world.”

Taken from Angela Giuffrida’s article appeared on The Local.

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01
Nov 2019
  • BY: italiancpafirms
  • TAG: Documents, Business, tax
  • 01 COMMENT

The FATCA agreement will also extend to Italian taxpayers

We already know FATCA (Foreign Account Tax Compliance Act), the US law issued in 2010, with the aim to prevent US taxpayers who are investing through foreign financial intermediaries from tax evasion.  In 2014 the US signed the agreement with the Italian government and extended it to American taxpayers (citizens or US residents) carrying out investments in Italy. The authorities are proceeding so that the agreement becomes bilateral. 

Banks, trust companies, investment companies, investment funds and certain types of insurance companies, must proceed with necessary verifications on tax matters. They also have to provide regular reports to Agenzia Delle Entrate (Italy’s Tax Authority), regarding accounts, deposits, and investments held in Italy by citizens and residents in the US and legal entities, even if they are not American but contain a significant US ownership.

These data are then forwarded to US tax authorities who can more easily trace tax evasion from US taxpayers.

Now, the authorities want the agreement to become bilateral.

So far FATCA had been focusing on the information regarding American tax-payers (US citizens or residents in the US) who invested abroad with the assistance of international intermediaries. Probably from the upcoming year, the agreement will apply to al Italy residents holding bank accounts in the US as well as Italian citizens or companies investing in the US.

US Banks will have to exchange with Italian tax authorities all the data and information regarding Italy residents owning investments overseas.

The Italian legislation will apply in this case. Italy’s tax law, unlike the US, requires not only all financial investments to be declared but also every type of investment and income produced, including real estate.

So, if you live in Italy and have been generating financial or real estate income in the USA, you are now required to declare it by filling up the RW framework of Italy’s annual income statement (Italian ‘dichiarazione dei redditi’).

If as an Italian taxpayer you have not been required to do so until today, we suggest taking into consideration an “active repentance” procedure. It would lead to a penalty, of course, but will prevent American financial institutions from communicating to Italy’s tax authority investments and revenue data before they are spontaneously declared by you in your annual income statement.

We highly recommend evaluating the matter carefully as, in the case of significant amount of undeclared income, legal sanctions might apply.

Our firm is at your disposal to provide information or assistance. Please contact us.

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01
Nov 2019
  • BY: italiancpafirms
  • TAG: Documents, Business, tax
  • 01 COMMENT

Incoterms Rules turn 80

The most commonly used tools for the international trade, the Incoterms (International Commercial Terms) Rules of the International Chamber of Commerce turn 80!
The first edition of the “International rules for the interpretation of trade terms” was published in 1936 indicating 11 terms, and the obligations of the seller and the buyer regarding goods’ delivery in international trade.


It was the result of years of information-collecting by the ICC (International Chamber of Commerce) established in 1919, regarding that time’s most widely used practice in the trade of goods.

The primary goal was to standardize the rules of interpretation of the terms, reducing any doubts or misunderstandings and, therefore, standardize and facilitate international trade.
All of the international trade practitioners were consulted: importers, exporters, carriers, shippers, insurance agents, financial institutions.

After the 1936 edition, another seven were published up to the 2010 eighth edition currently in force.
Over time Incoterms have been amended several times. New terms have been introduced and those not anymore in use have been suppressed.

Modifications regarding the interpretation have been also made thanks to important changes and innovations in the transport and logistics sector which have contributed to increasing or re-define customs responsibilities and safety-related requirements (introduction of six multimodal services and containers, changes in single markets, terror threat).

Incoterms are 80 years old and are still in great shape. Still a key tool to define responsibilities, costs, and risks regarding the delivery of goods in international sales contracts.
Incoterms ® is a registered trademark of the International Chamber of Commerce.
Taken from ICC International Chamber of Commerce.

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