International Tax Planning, Reporting and Compliance for Individuals

Nonresident individuals who move to Italy or the U.S. for a limited period of time or permanently are exposed to the risk of being subject to tax in Italy or the U.S. The actual tax treatment they are subject to eventually depends on how much time they spend in Italy or the U.S. in one or more tax years; what kind of work or activities they perform there, and what kind of income from source located in those countries they may earn. Similarly, they are subject to various reporting and compliance obligations. We assist clients dealing with the tax issues that arise in connection with their moving to or spending periods time in Italy or the U.S. and properly plan their move and change in tax residency in advance to minimize adverse tax consequences. On the other side, we also advise Italian and U.S. residents who move to a foreign country and are exposed to similar issues while still being subject to tax in Italy or the U.S.

Also, individuals residing in Italy or the United States having financial interests or even just signatory powers on investments or accounts outside of Italy or the United States are subject to significant reporting and compliance obligations. In Italy, Italian residents with assets, accounts or investments abroad must report them on a special section of their individual income tax return (Section RW), together with any transfer into or outside Italy or abroad concerning those assets, accounts and investments. Failing to file report is heavily sanctioned.

Similarly, U.S. citizens (living in the U.S. or abroad) and residents must report their foreign financial accounts by filing a special form (Foreign Bank Account Report) separately from and in addition to their individual income tax return. Also, starting with tax year 2011, they will have to file an additional report under the new FATCA legislation.     

We assist our clients to comply with the above set of rules or comeback in compliance by filing delinquent returns and trying to avoid or minimize penalties.