International Capital Amnesty Programs: Legalization of Assets in the Legal Field

Modern tax systems are rapidly moving towards full transparency. Automatic exchange of financial data (CRS), tightening control over foreign assets and new tax reporting requirements make it impossible to hide income abroad without serious consequences. In these conditions, timely legalization of previously undeclared assets becomes not only a way to avoid fines and sanctions, but also an opportunity to build a transparent financial strategy for the future.

International capital amnesty programs offer legal mechanisms for declaring assets, reducing tax and legal risks. However, the conditions of such programs vary from country to country, and errors in the legalization process can lead to additional complications, up to and including the loss of part of the capital.

In this article, we will analyze what opportunities capital amnesty programs open up, which jurisdictions offer the most favorable conditions and how the international law firm Antwort Law helps clients go through this process without unnecessary risks.

Target groups for which capital amnesty is relevant

Tax amnesty programs are aimed at different categories of asset owners:

• Owners of foreign accounts not declared to tax authorities
• Individuals who have received an inheritance or income abroad that is not reflected in tax returns
• Owners of foreign assets, such as real estate or business, not declared in tax returns
• Individuals planning to change tax residency and seeking to minimize tax risks
• Businessmen and investors who need to ensure free access to international banking services

If the applicant falls into one of these categories, participation in the capital amnesty program may be the only effective mechanism for protecting assets and ensuring financial security.

Popular international capital amnesty programs

Italy - Voluntary Disclosure: allows citizens and residents of the country to declare unregistered assets and avoid criminal liability.

• Tax rate: 3 to 5 percent of the declared assets.
• Benefit: no additional penalties for late payment of taxes.

UK – Worldwide Disclosure Facility (WDF): designed for UK taxpayers with undeclared income abroad.

• Tax rate: depends on the type of assets and the period of their ownership.
• Benefit: the possibility of voluntary disclosure without criminal prosecution.

USA – Offshore Voluntary Disclosure Program (OVDP) and Streamlined Filing Compliance: designed for individuals who have unintentionally violated tax laws (US citizens and green card holders)

• Tax rate: 5 to 27.5 percent depending on the program.
• Benefit: the possibility of avoiding criminal prosecution by the IRS.

UAE – Amnesty for Undeclared Account Holders: There is no standard amnesty program, but the country provides the opportunity for tax legalization through residency and corporate structures, which allows capital owners to legalize assets without paying high taxes.

• Tax rate: none, but compliance with FATF and local regulators is required.
• Advantage: the ability to structure assets without tax consequences.

Ignoring capital amnesty programs may lead to the following legal and financial risks:

• Tighter tax controls, including additional charges for previous periods.
• Blocking of accounts in foreign banks as part of measures to combat money laundering.
• Criminal liability for tax evasion in some jurisdictions.
• Restrictions on international transfers due to the automatic exchange of financial data between countries.

Main difficulties of independent capital amnesty

There are a number of legal risks when independently disclosing assets, including:

• Errors in the declaration, leading to additional taxes or prosecution.
• Incorrect choice of jurisdiction, which may result in the information provided being used against the applicant.
• Possibility of double taxation in case of incorrect execution of the asset disclosure process.

Responsibility for asset legalization requires an individual approach. In practice, successful completion of capital amnesty is ensured by professional legal support. The advantages of contacting Antwort Law:

• Legal expertise in the field of international tax law
• Individual approach to developing a capital amnesty strategy
• Complete confidentiality in the process of asset legalization
• Comprehensive support at all stages of asset declaration

Given the global strengthening of tax control, capital amnesty programs provide an opportunity for legal disclosure of assets, but the process requires careful analysis, since choosing an inappropriate jurisdiction may entail additional tax obligations.

Antwort Law provides legal support to clients, ensuring the legality of asset disclosure and reducing tax risks.

Lidia Ivanova

International lawyer
Antwort Law