If you want to minimise or extinguish your tax liability, engage an Italian tax advisor. Italy’s income tax advisors must be some of the best in the world and Italy’s tax advisors are real ‘value for money’ professionals too.
Expert Italian tax advisors will have you declaring either nothing or next to nothing while you live in a ten bedroom mansion, employ a few Indian (Indians seem to be popular as domestic staff in Italy) servants and cruise the streets of Italy in a gleaming red Ferrari, when you are not cruising the Mediterranean in your luxury motor cruiser, that is.
The activities of Italy’s effective tax advisors mean that every year something like 100 billion Euros never ends up in Italian state coffers.
Cash strapped Italy with its huge national debt and crisis related problems, has started to wake up to the fact that Italians do not pay as much tax as they really should do. Measures are being taken.
It’s taken Italy long enough to wake up, it has to be said.
You’ve probably heard of the well-heeled, the self-made, the nouveau riche, well, Italy has a new group to add to the list – the pseudo-riche.
The ‘pseudo-riche’ are only rich because their tax advisors ensure they pay the absolute minimum in taxes in Italy. In some respects though, bringing Italians to heel tax-wise may not be such a good thing.
Does Tax Evasion Fuel the Sales of Luxury Goods in Italy?
One does wonder whether things really would be any better in Italy if everyone did pay their tax dues. For one thing, sales of €100,000 plus cars and boats, as well as lots of other luxury goods, would take a nose dive. At the end of the day though, it would be fairer to those who do actually bother to pay taxes in Italy – all three of them.
The Joy of Databases
Sometime back I wrote that Italy’s financial police, the Guardia di Finanza, had stated playing with those new-fangled computer things, and had discovered the joys of databases.
As part of their computer games the Guardia di Finanza is now getting better and better at putting 2 and 2 together to find out if taxes are actually being paid.
Flash Car Drivers Stopped
Owners of flash cars can be stopped, their details taken, and then these details can be cross referenced with tax declarations. So, if someone is driving a €100,000 car, but only declared a taxable income of around €10,000 (or zero – which often happens in Italy), Italy’s tax police will start asking awkward questions. This will probably cause Italy’s pseudo-riche to start driving around in 10 year old Fiat Unos.
This is now happening. Italy’s tax police are also looking at well-heeled Italian cities – the streets of which are crammed full of Maseratis, BMWs and Porsches, and then checking out the average tax declarations in the area. Not sure if the sales of ancient Unos are on the rise though.
Prosperity being Investigated
In those prosperous looking Italian cities when investigations show that only three people in the city are declaring annual incomes of more than €100,000, but investigators can count 50 odd €100,000 plus cars buzzing though the streets on the average night, conclusions are reached that something may well be amiss tax-declaration wise, and that awkward questions really ought to be asked.
You would have thought that such checks could have been carried out even before computers came on the scene. Telephones have been around for quite some time, but then so have computers really. Now, at least there can be no excuses.
Times may start becoming tough for Italy’s pseudo-riche, and sales of 10 year old Fiat Unos will probably rocket.
The demand for clever tax advisors is likely to increase too.
My memory of RAI 1’s 22nd November Furbi o Ladri? (Crafty or Criminals?) documentary.
Note: Italy Chronicles may earn an affiliate commission if you purchase something through links in articles on this website. As an Amazon Associate I earn from qualifying purchases.