Italy and the Vatican on Wednesday signed an agreement to exchange financial information as part of efforts to fight tax evasion and money laundering. The Vatican said the deal meant Italy was "the first country with which the Holy See has signed an agreement that regulates information exchange". The deal will make it possible for Vatican and Italian authorities to swap details of taxable sums since January 1, 2009. "Italy and the Holy See are even closer with the signing of this convention on tax affairs," Paul Richard Gallagher, the Holy See's secretary for relations with states, told Vatican daily L'Osservatore Romano.
"More stable institutional and legal bonds are being added to the historic links". Gallagher added that the agreement would apply to Vatican employees and retired Holy See staff living in Italy, as well as other people and institutions, such as religious orders, holding money in the Vatican bank, the Institute for the Works of Religion (IOR).
"The agreement is an important step forward that continues the road of tax transparency and will reinforce the mechanism of voluntary disclosure," said Italian Economy Minister Pier Carlo Padoan.
The deal is latest step in the Vatican's drive to clean up its act on financial transparency, after a series of scandals hit the IOR, since Pope Francis was elected to the helm of the Catholic Church two years ago.
The problem of misuse of IOR accounts has been addressed to some degree, with the the closure of accounts of people who are not clergy or Holy See employees.
As of July, the Vatican bank had blocked the accounts of 2,000 clients and ended some 3,000 "customer relationships".
In recent months, Italy has signed tax treaties with Switzerland, Monaco and Liechtenstein to increase transparency and break down barriers created for tax collectors by bank secrecy regulations.
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