Thread by @aledeniz

When I tell this story, all Americans 🇺🇸 and most British 🇬🇧 don’t believe me.
Italy 🇮🇹 cannot have startups by design. This is due many items, starting with the untranslable “studio di settore”.
The 🇮🇹 tax authorities assume that given x company assets you MUST make a profit 1/5

https://twitter.com/michaelaarouet/status/1842802627521679624

Say you are a brilliant 🇮🇹 Italian who thinks they can create the new Ozempic in 10 years, and you manage to find the investors to back you up.
You buy computers, lab equipment, you hire people. The day after the 3rd year the🇮🇹 tax agency will knock at your door. 2/5

The 🇮🇹 tax agency will ask you to pay taxes for the next year – 13 months before the fiscal year close – and you will have to pay more than their “studio di settore” assumes based on your capital investment. You can refuse, against your accountant advise. 3/5

The 🇮🇹 tax authorities will send an army of uniformed officers who will pour through every single pore of your company. Every real work will be stopped for at least 2 months while looking for displaced mice – in my case I lost a week looking for a misplaced 5¼-inch floppy. 4/5

This will be repeated every single year you dare not to pay taxes on their assumed profit, while exposing you to a literally uncountable amount of fines. It is basically impossible to startup a high value added business, unless the revenue stream can be started straight away. 5/5

I focused on startups because that was my experience, but @gbponz is absolutely right here:

the double whammy of being taxed on a function of our capital investments and having to pay taxes 1 year ahead makes _all_ cyclical business unsustainable long term.

https://twitter.com/gbponz/status/1842880922674143575

@Robkearney1981 From 1969 to 1992 Italy was mismanaged by a string of incompetent and often partially corrupt government. The oppressive judicial and fiscal system was built on the backlash from that. The historical mistake was not to default on the public debt in 1992.

@Robkearney1981 Italy had another major chance to default on its public debt in 2011. The ECB stepped in and had basically kept the country afloat ever since. Future historians will describe the whole period from 1992 until the resolution as “kicking the can”. All Italian governments can do.

@gbponz To clarify:

Employees excluded, almost everyone in a Italy pays 100% of their estimated taxes 1 month before the 1st revenue of the year – 13 months before the end of the fiscal year.

In fact they pay at least 40% 6 months before the 1st revenue – 18 months before year’s end.

https://twitter.com/jackal854/status/1843235172139126960

@Crash_Horizon @dsracoon The 5¼-inch floppy story: an officer noticed a book with an included floppy. He asked why the floppy serial was not in our inventory and its whereabouts. I spent 1 week to locate it. We didn’t even have 5¼-inch readers. We had to amend our inventory to include it to avoid a fine.

@gbponz This thread reached 1M views in 1 day. Zero feedback from the politicians on the very lively Italian X-sphere.
One of the very first Italian comments mentioned @marattin – who was the economic advisor of 2 🇮🇹 PMs and was the president of the Finance commission in the Lower House.

https://twitter.com/gigieinaudi/status/1842892427700400559

@nickolai89 @gbponz @marattin If you accept this agreement – the tax agency is currently mailing all SMEs they suspect have not faithfully declared their revenues – they also offer you heavy discounts on the taxes you didn’t pay in 2018-2022. They discounts depend from your ISA rating.

@nickolai89 @gbponz @marattin E.g. if you have got a 10 in your ISA it will allow you to pay them not to investigate you for 2018-2022 if you pay taxes on 5% of the assumed revenue. It is a very good deal, I am pretty sure it will be taken by lot of companies who did pay their taxes in full as risk avoidance.

@nickolai89 @gbponz @marattin But even if you got a 3 they will still halve your taxes. They allow you to pay in instalments, pre approved, 24 monthly payments at 2% interest.
It’s sheer madness all around, the system heavily reward and incentivise tax dodgers.