One of the priorities of the current government is the fight against tax evasion.For many years the Italian Revenue Agency (Agenzia delle Entrate) has tried, with various tools and policies, to counter the behaviour of the “cheats” by monitoring “anomalies”: the redditometro, the spesometro and now the latest offspring, the “risparmiometro”.
What it is and how it works
The risparmiometro is an algorithm that calculates the difference between what is declared in the 730 (or Unico form) and what has been saved and deposited in bank current accounts. The underlying logic of this calculation is the simple assumption that a taxpayer declares a certain income, but the balance of the sums held in the current account then has no logical justification. If this occurs, the tax authorities, who will not turn out to be so friendly after all, will launch checks to verify whether the deposited sums are the result of tax evasion/avoidance or other unlawful activities.
Obviously there could be many cases and in some situations, such as when parents help their children, there could be many problems. We must therefore learn to defend ourselves against possible anomalies, whether arising in “good faith” or not. Here are a couple of examples:
First situation
Giuseppe Verdi is a regular employee and earns 1,200 euros a month. His employer makes a bank transfer every month into his current account. Giuseppe, however, also does freelance work, let us say “off the books”. This work is paid in cash, and therefore do not appear in any records. He then decides to spend the cash on his own maintenance and that of his family. As a result, he leaves his salary in the current account, where it accumulates month by month. This behaviour is the anomaly that gives the tax authorities grounds to ask how he supports himself and lives.
Second situation
Ugo Fantozzi lives alone and has no job. He manages to support himself thanks to a lump sum paid by his parents who, seeing him in difficulty, give him 200,000 euros of their savings, which Ugo will use to support himself until he finds work. Ugo is in good standing with the tax authorities, but the Revenue Agency, seeing that he does not work, could audit him in view of the money held in the bank.
When does it start? The risparmiometro is already active, and since January 2019 it also applies to companies. It should also be borne in mind that the Revenue Agency’s monitoring of citizens’ current account balances is by no means new. In 2011, Mario Monti’s “Salva Italia” decree (Decree-Law 201/2011) provided that the tax authorities may access taxpayers’ bank data in order to reconstruct their financial position on the basis of deposits.
What does the formula provide for?
It is useful to know that banks, since the entry into force of the Monti decree in 2011, are required to provide the Revenue Agency with the current account balance. At this point the calculation is very simple: the balance is compared with the income tax return and, if the difference is significant, a check is triggered. What is meant by a significant difference? On this point the Revenue Agency usually considers a deviation of more than 20% between what is declared and what is held in the current account. A difference of more than 20% is therefore to be considered “suspicious”.
Who is audited?
Note that the risparmiometro is not aimed only at the “rich”. Checks are not based solely on million-euro current accounts, but also on more “ordinary” current accounts where the algorithm nonetheless calculates a substantial difference between what is deposited and what is declared. Moreover, the check is not limited to current accounts, but everyone who has financial relationships such as securities accounts, deposit accounts, postal savings bonds, third-party accounts, investments in collective asset management undertakings, insurance products and credit cards.
What are they checking?
Starting from the ownership of financial relationships, the risparmiometro first identifies the holders of:
Current accounts;
Deposit accounts;
Credit cards
Government bonds
Bonds
Shares
Fiduciary relationships;
Insurance policies;
Pension funds;
Collective investment funds;
Postal savings books;
Interest-bearing bonds.
It then reconstructs that person’s income situation, setting the data on the financial product alongside those in the tax return. Any discrepancy found will be grounds for carrying out a more in-depth audit.
Can you defend yourself? Yes, here is how
Starting from the premise that it is unlikely that a person who earns 1,300 euros a month withdraws nothing from the account for subsistence, food, clothing and bills, one therefore lives on money received in cash and “under the table”.
However, the Revenue Agency cannot accuse the taxpayer without even having heard his or her reasons. A second phase therefore follows, the “preventive adversarial procedure” (contraddittorio preventivo), which consists of a meeting with the tax official, to whom it can be explained that the money does not come from unlawful activities or tax evasion/avoidance.
If the reasons are not sufficiently convincing and are not supported by tangible events and documents, the matter moves on to a tax assessment, that is, a more in-depth audit aimed at clarifying the taxpayer’s situation.
Comparison of the spesometro, redditometro and risparmiometro
All three of these tools share a single common purpose: to combat tax evasion/avoidance, even though they are very different:
The spesometro compares expenses incurred with declared income, on the premise that one cannot spend more than one earns;
The redditometro compares the value of assets owned with declared income, on the premise that it is rather odd to own assets of considerable value if the declared income is much lower;
The risparmiometro compares savings held with declared income, on the premise that a current account holding a large sum relative to declared income is certainly a cause for doubt.
SOURCE: https://www.wallstreetitalia.com/tutto-quello-che-dovete-sapere-sul-nuovo-risparmiometro/
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