The changes in the AEO (Authorized Economic Operator) guidelines
Studio TCL analyzes also the effects the automatic multilateral exchange of financial information has had on taxpayers
Updated measures introduced by the European Commission – Taxation and Customs Union
As from March 5th, 2018, the Community electronic system, AEO / EOS (Economic Operator System), is available for Member States following modification of the Union Customs Code (UCC) and its implementing provisions.
The above upgrade was announced by the European Commission – Taxation and Customs union by publishing the “New application for obtaining an AEO authorization” on February 28th, 2018: in essence, from that day on, Member States are required to record or exchange personal data within the AEO / EOS system, in compliance with the new regulations.
The updated Union Customs Code stipulates that the status of Authorised Economic Operator shall no longer be guaranteed by a certificate, in fact, two authorizations are required: AEO/ customs simplifications (AEOC) and AEO/ security and safety (AEOS). These two authorizations can be held simultaneously. It should also be reminded that all economic operators working within the international supply chain whose business is subject to customs regulations, holding positive professional qualification in respect of other operators and deemed reliable and safe within the supply chain, are eligible to be granted that status and consequently benefit from the following advantages:
- assessment of a reliability and security status within the community
- reduction of controls
- customs simplifications
- facilitations in respect of security and safety
- improved relations with customs authorities
- mutual acknowledgement
The updated AEO guidelines also introduce a variety of form-filling innovations particularly related to the classification of operators' economic activity, based on specific criteria taking into account the size of the company, as well as the confirmation of applicants' role within the international supply chain and name of the person responsible for customs related activities.
The enforcement of the new provisions set out in the updated AEO guidelines will provide specific benefits to each single business category, featuring a great opportunity for all subjects operating internationally.
PKF - Studio TCL Tax Consulting Legal
Genoa – Milan
First extended comments on the effects the automatic multilateral exchange of financial information has had on taxpayers
Pkf Studio TCL wish to pinpoint that Switzerland has joined, for the first time ever in 2018, the exchange of financial information regarding year 2017.
Italy committed to the “Common Reporting Standard” issued by OCSE, also renowned as the key tool to exchange Bank information, since its launching. The regulation was developed by the G20 in collaboration with the European Union to enhance the exchange of information on investments and accounts held by taxpayers abroad in order to minimise tax evasion and money laundering. For the time being over 100 Nations subscribed the initiative and Financial Authorities have already started exchanging financial information of individuals residing within their jurisdiction with other signatory countries. Financial information are submitted automatically and electronically to Tax Authorities of partnering States on an annual basis.
For the second time recently, Italian financial brokers are providing Bank accounts information of non-resident individuals to the Tax Authority. The deadline to submit data regarding year 2016 was August 21st, 2017, while financial information concerning year 2017 must be submitted by April 30th.
After having received financial information from Banks, the Italian Tax Authority will re-direct collected data to the other signatory jurisdictions by September 30th, 2018. On the same deadline the Italian Tax Authority will receive from these Countries' Tax Authorities similar information and data regarding foreign accounts and assets owned by individuals residing in Italy. Particularly:
- financial information concerning each financial account owned by a natural person or entity within a partnering jurisdiction – such as corporations, trusts and foundations – owned by one or more individuals, pursuant to money laundering regulations (look-through approach), as well as financial life-insurance contracts, must be provided;
- regarding each financial account, all details of the individual (name, address, Country of residence, tax code) and details of the financial account (name of the broker house and account number) must be provided;
- furthermore, financial information to be exchanged don't exclusively concern capital gains, active bonds, interests and dividends, but must also include accounts balance, considerations for sales and redemptions.
By implementing the exchange of financial information, endorsed by 100 Nations, Tax Authorities are disclosed full details of bank accounts, deposits and other financial reports held by Italian citizens in other jurisdictions which signed the CRS.
Year 2017 data will be more relevant compared to 2016, in fact, for the first time this year the exchange of information will also concern those countries which endorsed the accord a year later, like Switzerland, Andorra, Austria and other farther jurisdictions like Russia, China, Singapore, Hong Kong, Australia, Brazil, Panama, Marshall Island, Chile, Saudi Arabia and UAE. Full details of signatory countries is reported on OCSE website, which also provide details about the entry into force of the 'exchange of information'.
Consequently, the control procedures provided by Tax Authorities regarding adequate compliance with the obligations in Italy are extremely faster.
Based on 2016 experience, after having received financial information from foreign jurisdictions, pursuant to provision n° 299737 of Tax Authority's Manager dated December 21st, 2017, the Italian Tax Authority sent Italian taxpayers a specific notice demanding to regularize their situation.
Disregarding unavoidable mistakes which might have been made by foreign financial brokers while submitting the required information to the Italian Tax Authority, several taxpayers, despite holding, directly or indirectly, financial activities abroad, were not in fact obliged to fill-in the RW form in Italy.
Delivering a sort of unofficial notice before starting a real investigation on a specific taxpayer is a particularly appreciated solution.
A taxpayer receiving this notice, after having evaluated compliance of his financial position with regulations, would be worth clarifying the situation with the competent local Authority, pursuant to aforementioned regulations.
As a matter of fact, in 2017 several taxpayers had 'wrongly' received a notice from the Italian Tax Authority: for example cross border workers, actually entitled not to fill in the RW form, diplomatic officials and tax payers who repatriated their business abroad under the administration of an Italian trust 'not holding the title'.
In these specific instance, the individual residing in Italy actually holds a foreign account and the exchange of information will be called for. While writing down the list of recipients, the Italian Tax Authority shall undertake a preliminary review, in order not to uselessly burden taxpayers and local Tax departments.
This automatic acquisition of information on foreign accounts and income by the Tax Authority actually makes the RW form useless (and undue).
In fact provision art. 6 comma 4 of the Taxpayers statute (law 212/2000), on the basis of which “Taxpayers cannot be anyway required to submit documentation or information already held by the financial administration or other public jurisdictions as reported by the taxpayer”.
We confide Tax Authority shall promptly clarify the situation in order to prevent useless and expensive fulfilments and heavy sanctions which would undoubtedly trigger a legal action.
Until Financial Authority won't clarify the matter we wish to remind that, besides the actual holders of foreign accounts even delegates are required to monitor foreign financial activities.
In this specific instance each interested individual is required to show the whole amount, while IVAFE tax must be exclusively paid by the account's holder.
Finally, we wish to pinpoint that taxpayers holding a mere proxy and operating on behalf of another individual do not need to fill the RW form in: for examples managers of companies holding foreign accounts, provided they are regularly recorded.
PKF Studio TCL - Tax Consulting Legal
Genoa - Milan