Foreign assets and income: data exchange is being stepped up
The increase in activity and analysis is the result of the full implementation of the DAC 2 and DAC 3 information exchange schemes – named after the directives on the exchange of financial data and cross-border tax rulings – in respect of the 2020, 2021 and 2022 tax years
Foreign income: failing to declare relevant details and failing to respond to compliance letters could prove costly. The spotlight is also on the transfer of foreign assets through inheritance or gifts, to ensure they are correctly subject to tax.
In its 2026 audits, the Italian Revenue Agency is scrutinising those who have foreign income and who are required to fulfil tax reporting obligations in Italia.
The increase in activity and analysis is the result of the full-scale implementation of the information exchange DAC 2 and DAC 3, named after the directives on the exchange of financial data and cross-border tax rulings, relating to the tax years 2020, 2021 and 2022.
Income from employment and/or pensions from foreign sources, or financial assets held abroad, will come under scrutiny. The red flag is a failure to comply correctly with tax reporting obligations. There may therefore be two triggers: either a failure to respond to compliance letters already sent, or the holding of assets abroad for which a tax return has not been filed in relation to the RW section.
The intention to step up risk analysis in this area was also highlighted in the agreement between the Revenue Agency and the Ministry of the Economy for the three-year period 2026–2028, which is currently awaiting approval. The key measure is to increase the use of data derived from the exchange of information with other administrations, via the Common Reporting Standard (CRS), to combat international tax evasion, the unlawful holding of assets and financial activities outside national borders, as well as fictitious residencies abroad.
