Things are bad when the Italian government is accusing the UK of promoting tax cheating. But that's what's happening. As the Guardian notes this morning:
An Italian crackdown on tax cheats has swept up former motorcycle champion Valentino Rossi. Rossi is being investigated for suspected tax evasion on undeclared revenues of 60 million euros ($83 million), the state tax agency said on Wednesday. The state is going after Rossi for a total of 112 million euros, a source close to the situation said. The figure comprises 43.7 million euros of unpaid tax as well as fines and interest that almost triple the amount he owes Italy, the source said.
The inquiry is linked to Rossi's decision in 2000 to take up residence in Britain to take advantage of its tax regime.
As they also note, Vincenzo Visco, the Italian government's tax chief said:
Italy could turn to the European Union to try to strike down British law under which "a more or less fictitious residence in London allows you not to pay taxes in your own country".
Quite right too: the domicile laws are, without doubt a harmful tax practice as defined by the EU. It's just that as yet that definition does not relate to personal tax. If the Italian's can achieve that (and it's overdue) then the UK will have to move on this one.
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[…] Curiously they say this after noting the the EU membership agreements do not, in their opinion, give Italy an opportunity to challenge the UK domicile rule, as they would like. I think there’s good reason for them doing that. What they are hinting at is that this is the way Europe could object to the domicile rule. It is. That’s why we have pointed this out. […]