Political finance

General

How are political parties and politicians funded in your jurisdiction?

Italy held referendums in 1993 and 1997 on financing of political parties. In 2014 legislation was passed to phase out the state financing of political parties (Decree Law No. 149/2013, as converted into Law No. 13/2014), with changes that happened gradually over the period from 2014 to 2017. This has represented a significant change in a political system that had relied on public financing since the first specific law was enacted in 1974. The reform makes Italy the second EU member state without a system of public party financing in place (the only other exception, Malta, is considering moving to state funding).

Phasing out of state financing has gone hand in hand with encouragement of both direct and indirect contributions by citizens and legal persons in favour of political parties, which are the cornerstone of current regulation (articles 10-12, Law No. 13/2014).

For direct donations, the cap on voluntary contributions for both natural and legal persons is set at €100,000 annually. For indirect contributions, Law No. 13/2014 maintained the option for natural persons to devolve a compulsory 0.2 per cent of their annual income tax to political parties, after taxpayer contributions had first been introduced as a source of financing for political parties in 1997 (Law No. 2/1997).

Registration of interests

Must parties and politicians register or otherwise declare their interests? What interests, other than travel, hospitality and gifts, must be declared?

According to Law No. 441/1982, elected MPs and government members must declare their financial interests within three months of their appointment. Attached to the declaration on personal income, lawmakers must disclose details on the financing of their campaign expenditure including information on individual donations received above €5,000 per calendar year (see question 20).

Together with the previously discussed lobbying register and dedicated Regulation, in April 2016 the Chamber of Deputies adopted a code of conduct for its elected members. This code of conduct reinforces the interest registration requirements already mandated by previous legislation and lays down detailed rules on legislators’ declarations, which must include information on positions held, and on any professional or entrepreneurial activity performed.

Contributions to political parties and officials

Are political contributions or other disbursements to parties and political officials limited or regulated? How?

In order to receive direct contributions and voluntary tax-exempt indirect contributions, political parties must comply with the requirements of transparency and internal democracy as established by legislation, and be listed in a dedicated public register.

The annual upper limit for direct contributions is set at €100,000 for both individual citizens and companies or other entities. There is, however, a distinction between the two categories of donors. If the donor is a natural person, he or she can devolve up to €100,000 to a single party, but there is no cap on the total amount given. If, on the other hand, the donor is a legal person, the sum of €100,000 is an overall cap on the entity’s contribution.

Donations to parties made by both natural and legal persons benefit from tax relief: taxpayers and legal persons can deduct as a tax credit (respectively for income taxation and corporate taxation) 26 per cent of their annual contributions between €30 and €30,000 (article 11, Law No. 13/2014).

Financial bookkeeping is mandatory for political parties and transparency is high, as parties must disclose donors’ names whether they are natural or legal persons if the threshold of €5,000 per calendar year is exceeded (article 5, Law No. 13/2014). An exception to this disclosure requirement is foreseen for donors who have not given their explicit authorisation to treatment of personal data in compliance with data protection regulations.

Sources of funding for political campaigns

Describe how political campaigns for legislative positions and executive offices are financed.

After public funding for campaign-related expenditure was phased out between 2014 and 2017, political parties now rely on direct and indirect voluntary financing.

First, direct private contributions are capped at €100,000 per year for both natural and legal persons and benefit from partial tax relief (see question 19). Secondly, parties benefit from the indirect two-per-thousand contribution, which allows a taxpayer to earmark 0.2 per cent of his or her taxable income as a contribution to one eligible political party. Thirdly, parties can resort to fundraising via campaigns coordinated by telecommunications providers (article 13, Law No. 13/2014). Fundraising campaigns conducted by telephone, text message, or other related telecommunications methods are self-regulated by authorised telephone operators, in accordance with the guidelines established by the telecommunications authority.

Reporting of direct contributions made by natural and legal persons is mandatory, as recipient parties must record the donation sums received. Once elected, MPs must declare their financial interests and income situation and this information is published on the institution’s website. Elected legislators must, at the same time, communicate the details of every direct contribution received if the total amounts to over €5,000 per year and this information must be published on the party’s and Parliament’s internet portals.

Contributors who donate to registered parties through non-cash payments equivalent in value to less than €100,000 per year, who consent to guarantee the traceability of the operations and reveal their identity, are exempt from the requirement (faced by other contributors) to submit a joint declaration with the recipient party to the President of the Chamber of Deputies.

Lobbyist participation in fundraising and electioneering

Describe whether registration as a lobbyist triggers any special restrictions or disclosure requirements with respect to candidate fundraising.

The 2014 legislation on abolition of public financing for parties and on voluntary and indirect contributions in their favour does not contain any specific requirements on disclosure of lobbyists’ donations, given the absence of any national legislation at the time of its approval. Equally, the Regulation does not include any specific provisions on interest representatives’ donations to political parties and candidates. The general restrictions on physical and legal persons remain applicable.

Independent expenditure and coordination

How is parallel political campaigning independent of a candidate or party regulated?

Political campaigning independent of a candidate or party is not regulated in Italy, as there are no specific rules on individuals or groups not directly related to political parties wishing to operate a parallel media advertising or grass-roots campaign. Independent political campaigning is historically limited in Italy, both for cultural reasons and because the system of public financing for electoral campaigns was only recently abolished.