The Italian saver between the tax office and the exchange office

A tax system in transition

The Italian tax system of the early Republic rested on a mix of old real taxes on land, buildings and business income and a progressive surtax on total income, the imposta complementare. Assessment was largely a matter of negotiation between the taxpayer and the local tax office. The reform associated with the finance minister Ezio Vanoni, adopted in 1951, introduced the obligation for taxpayers to file an annual declaration of their income, which Vanoni presented as an instrument of fiscal truth and loyalty between citizen and State.¹ The law of 11 January 1951, no. 25, on the perequazione tributaria is usually taken as the starting point of the modern Italian income tax.² For the owner of a family business in Brianza or a professional in Milan, the new declaration was the first systematic demand to disclose income and assets to the tax office. The incentive to keep part of the savings outside the system grew accordingly.

Shares were a special case. Since the fascist legislation of 1941, Italian shares had to be registered in the name of the holder (nominatività obbligatoria dei titoli azionari). Every Italian shareholding was therefore known to the company and, through the company's records, accessible to the tax authorities.³ An Italian investor who wanted to hold shares anonymously had two options: to hold them through a foreign intermediary, such as a Swiss bank acting as nominee or a Liechtenstein or Panamanian company, or to sell his Italian shares and invest abroad in bearer securities. Both options led to Switzerland. When the first centre-left government introduced a withholding tax on dividends by the law of 29 December 1962, no. 1745, the tax administration acquired a new source of information about shareholders. The market reacted at once. Shares were sold and the proceeds left the country in banknotes.⁴ Berbenni's reconstruction of the typical operation, discussed in the next section, begins precisely with an Italian who sells his shares and hands the proceeds to a stockbroker.⁵ The great tax reform of the early 1970s completed the change. The enabling law of 9 October 1971, no. 825, and the decrees adopted under it replaced the old system with value added tax from 1 January 1973 and with a personal income tax (IRPEF), a corporate income tax (IRPEG) and a local income tax (ILOR) from 1 January 1974. The procedural decree no. 600 of 29 September 1973 strengthened the powers of assessment and introduced withholding taxes on interest and other income from capital.⁶ Each step towards a more effective income tax increased the value of Swiss discretion for those who had income or assets to hide. The reform coincided with the oil shock, with an inflation rate that remained well above the average of the industrial countries and did not fall below 10 per cent between 1973 and 1984, and with the political tension described above.⁷

Notes

1. Wikipedia (Italian), "Ezio Vanoni", https://it.wikipedia.org/wiki/Ezio_Vanoni ("Nel 1951 fu uno dei principali fautori della riforma tributaria italiana ... introducendo anche l'obbligo della dichiarazione dei redditi"). Used as a last resort. ↩
2. Law of 11 January 1951, no. 25, "Norme sulla perequazione tributaria e sul rilevamento fiscale straordinario", Gazzetta Ufficiale no. 25 of 31 January 1951, table of contents of the issue at https://www.gazzettaufficiale.it/gazzetta/serie_generale/caricaDettaglio? dataPubblicazioneGazzetta=1951-01-31&numeroGazzetta=25. The title and date are also given in Wikipedia (Italian), "Legge Vanoni", https://it.wikipedia.org/wiki/Legge_Vanoni (used as a last resort). ↩
3. Royal Decree-Law of 25 October 1941, no. 1148, converted by Law of 9 February 1942, no. 96, on the compulsory registration of shares. ↩
4. Law of 29 December 1962, no. 1745 (cedolare d'acconto on dividends), and the anonymous cedolare secca option of 1964. Berbenni (as above), 334–335, links the outflows of 1962–1964 to the political shift and fiscal fears without naming the law. ↩
5. Berbenni (as above), 336–337, Table 1, "Operazione A": "Il signor X, italiano, vende azioni Alpha di cui è proprietario; X versa il ricavato in un conto intestato all'intermediario Y (agente di cambio) ...". ↩
6. Presidential Decree of 26 October 1972, no. 633 (VAT, in force from 1 January 1973), see Wikipedia (Italian), "Imposta sul valore aggiunto (Italia)", https://it.wikipedia.org/wiki/Imposta_sul_valore_aggiunto_(Italia); Presidential Decrees of 29 September 1973, nos. 597, 598 and 599 (IRPEF, IRPEG and ILOR, "in vigore dal 1974"), see Wikipedia (Italian), "Imposta sul reddito delle persone fisiche", https://it.wikipedia.org/wiki/Imposta_sul_reddito_delle_persone_fisiche. Both used as a last resort. ↩
7. Banca d'Italia, "Dagli anni Cinquanta a Maastricht", https://www.bancaditalia.it/chi-siamo/storia/anni-cinquanta/index.html ("In Italia l'inflazione fu notevolmente più alta che nella media dei paesi industriali. Tra il 1973 e il 1984 non scese mai al di sotto del 10 per cento"). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.