TAX NEWS - JUNE 2010

Italy Tax: Italy Finance Police Uncover 30 Million-Euro Tax Evasion Ring

by Jeffrey Donovan, 04 June 2010 -- Italian finance police said they uncovered a global tax-evasion ring that avoided paying more than 30 million euros ($36 million) after a routine roadside check on two "luxury SUVs" from Monaco and San Marino.

Nine people including four Rome-based accountants were arrested in the investigation, which began after a background check on the drivers showed they had no registered assets, according to an e-mailed statement today from finance police in Frosinone, a city about 90 kilometers (56 miles) south of Rome.

The network used a series of front companies based in tax- havens including Panama, Portugal's Madeira island and San Marino, a landlocked republic within Italy, police said. The group evaded paying more than 30 million euros in taxes over the last three years alone, according to the statement.

Italy loses about 120 billion euros a year in unpaid taxes and a government plan to overhaul the fiscal system will crack down on evasion, Prime Minister Silvio Berlusconi said on May 26. Italy Finance police the same day raided branches of 16 banks and two fiduciaries across six regions amid a probe into potential tax evasion involving accounts in San Marino, which the Finance Ministry has said will remain on an Italian blacklist until it adopts international standards on taxes and money laundering.