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Italy-Switzerland deal will help catch tax evaders

Italy and Switzerland on Monday signed a "historic agreement" to fight tax evasion, giving Italians until September to disclose funds hidden across the border.

Published: 24 February 2015 10:59 CET
Italy-Switzerland deal will help catch tax evaders
Italy’s finance minister, Pier Carlo Padoan, signed the deal with his Swiss counterpart Eveline Widmer-Schlumpf in Milan. Photo: Olivier Morin/AFP

Italy’s finance minister, Pier Carlo Padoan, signed the deal with his Swiss counterpart Eveline Widmer-Schlumpf in Milan on Monday.

Under the agreement Italian authorities will be able to request more financial information to catch tax evaders.

The protocol was hailed as a “historic agreement” by Italy’s finance ministry, which aims to reclaim billions of euros in lost tax revenue.

Both of the countries’ parliaments must now approve the deal, although authorities will be able to backdate their requests to February 23rd.

Italians who have money stashed away in Swiss bank accounts now have until September to disclose such funds to the authorities and pay their tax bills in full.

Swiss nationals working in Italy are also included in the agreement, Italy’s finance ministry said in a statement.

Switzerland will now be taken off Italy’s “black list”, thanks to the new era of cooperation. 

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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Published: 30 October 2023 15:21 CET
Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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