Property Taxes On Real Estates And Financial Assets Owned Abroad By Italian Residents And On Assets Subject To The Tax Amnesty

1 INTRODUCTION

Article 19 of the Law Decree no. 201 dated 6.12.2011 converted into the Law dated 22.12.2011 no. 214, called "Monti's Decree", has introduced:

A new tax equal to 0,76% on real estate properties placed abroad and owned by individuals resident in Italy, starting from 2011; A new tax equal to 0,10% for 2011 and 2012, and to 0,15% starting from 2013, on financial assets owned abroad by individuals resident in Italy; A new special duty stamp tax equal to 1% for 2012, to 1,35% for 2013 and to 0,4% starting from 2014, on amounts repatriated according to the tax amnesty and still not disclosed; An extraordinary tax equal to 1% on amounts subject to the tax amnesty that have been partially or fully withdrawn from the deposit. Afterwards, article 8 of the Law Decree no. 16 dated 2.3.2012, converted into the Law no. 44 dated 26.4.2012, has substantially modified the above mentioned new taxes, introducing:

A specific taxable base on foreign real estate properties in case they are placed in the European Union (EU) or in the European Economic Space (EES) that grant information exchange (Norway and Island); The measure about the new tax on financial assets owned abroad that is now calculated on a fix base and is applied to accounts opened in a financial institution resident in the EU or in the EES granting information exchange. Some amendments to the calculation taxes due on assets subject to the tax amnesty and deadlines for their payments Enforcing measures

With disposition of the Tax Agency no. 72442 dated 5.6.2012 the enforcing measures have been issued .

2 THE NEW TAXATION ON FOREIGN REAL ESTATE PROPERTIES

The so called "Monti's Decree" has introduced a new tax on real estates value (buildings and land) placed abroad, for any use, owned by individuals resident in Italy.

The tax is due for real estate properties owned with any right.

Real estate properties disclosed under the last tax amnesty through the regularization procedure are also subject to the new tax.

2.1 EFFECTIVE DATE

The said new taxi s applied starting from 2011 (therefore they have to be included in the UNICO 2012 form).

2.2 TAXABLE SUBJECTS

Are subject to the payment of the new tax on foreign real estate properties the individuals considered resident in Italy for fiscal purposes who are:

Owner of the properties (landlords); Or owner of any other real right. On the contrary the following real estate properties placed abroad are excluded from the new tax:

owned by companies and similar legal entities; trusts; non commercial entities. 2.3 TAX CALCULATION

The tax rate is set at 0,76% and has to be applied:

on the cost value of the property as deriving from the sale-and-purchase agreement or from any other agreement available; in case none of the above is available, on the market value of the property available for the place where it is placed. In case the asset is no more owned by the tax payer on December 31st, the value that has to be considered is the one at the end of the period of ownership.

The value of real estate properties acquired through an inheritance procedure is the one included in the inheritance return or in the registered SPA or, if none of the above is available, the cost suffered by the late parent or by the donor as resulting from any documentation, or in case of missed documentation, the market value of the property available for the place where it is placed.

In case the value is expressed in a currency different from Euro, the exchange rate to be applied is the one applicable for the filing of RW paragraph of the UNICO form.

2.3.1 Value of real estate properties placed within the European Union or within the European Economic Space

The value of real estate properties placed within the European Union or within the European Economic Space that grant an adequate exchange of information (Norway and Island), the value is the cadastral one used to pay property taxes in the foreign country.

The same criterion is applied even when assets has been acquired through an inheritance or donation procedure.

In case this value is not available the tax payer has to consider the cost coming from the SPA or, when missing, from the market value of the assets in that place.

2.3.2 Tax features

With relation to this new tax, we'd like to outline that:

it is proportionally applied to: the quote of ownership of the property; the period of the year calculated in months when the property has been own, to the extent that the month is considered in full if the ownership endured for at least 15 days; the tax paid in the foreign country can be deducted up to the amount of the new domestic tax. With modifications introduced by the Law Decree 16/2012, for real estate properties placed in the European Union member states or part of the European Economic Space that grant information exchange (Norway and Island), the tax payer is allowed to deduct a tax credit equal to property and income taxes, if not already deducted on personal income tax...