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Italy to boost tax compliance through non-cash payments

Thursday, 30 January 2014   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas (

From March 28 onwards, according to a recently-published decree, there will be a low limit on the amount of cash that Italian businesses, including professionals, will be allowed to accept in payment for goods and services, as a further means to increase tax compliance and counteract attempted contraventions of the country's money-laundering regulations.

From March 28, 2014, so as to cut the possibility for business transactions to be unrecorded, and thereby to reduce Italy's untaxed underground economy, all payments for the purchase of goods or the provision of services in an amount greater than EUR30 (USD41), to businesses with a annual turnover greater than EUR200,000, will require to be made by means other than cash. Businesses with a lower turnover have until June 30, 2014, to follow the new regulation. 

It is therefore expected that all businesses will need to equip themselves with an authorized electronic authorization device at the point of sale, for the use by the customer of a debit card, or with the means to make direct internet bank transfers, where funds are immediately transferred from the cardholder's designated bank account.

In addition, with 90 days of the gazetting of the decree (i.e. by March 28), and in order to further the policy's objectives, the Government may also institute new payment thresholds or different turnover limits, and the business obligation may be extended to other means of electronic payment.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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