Business Taxes in Italy

[ChrisPec]

Hi guys!
I'm new here and I would like to create a website, but I had few questions to ask you because I'd like to understand if this is Italian problem or it's pretty much everywhere the same thing ahahah.
Basically in Italy if I want to create a website from scratch I should pay 7k of taxes per year even if I don't make money at all out of it, is it like this also in your countries? Because I wanted to start this website but I can't afford 7k in order to pay accountant, tax and other shit like this at the moment, I'm a student and I don't have a clue where to find those money lol .

Let me know everyone!

 

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[alexkuzmov]

Hi guys!
I'm new here and I would like to create a website, but I had few questions to ask you because I'd like to understand if this is Italian problem or it's pretty much everywhere the same thing ahahah.
Basically in Italy if I want to create a website from scratch I should pay 7k of taxes per year even if I don't make money at all out of it, is it like this also in your countries? Because I wanted to start this website but I can't afford 7k in order to pay accountant, tax and other shit like this at the moment, I'm a student and I don't have a clue where to find those money lol .

Let me know everyone!

This doesnt sound right, for Italy or anywhere really.
Who told you that you have to pay such tax and pay to whom?

 

[Simon Angel]

What's the website about? Perhaps the purpose of your website may have had something to do with the shady advice you were given. In any case, sounds like complete BS.

 

[ChrisPec]

This doesnt sound right, for Italy or anywhere really.
Who told you that you have to pay such tax and pay to whom?

Because it is considered as an economic activity, even though you don't sell or make any money, so you must pay: a given amount in order to create the company (about 1k), 4k of euros per year also if you make nothing because they are mandatory plus expenses for accountant and IF you make money you have to pay other taxes. I have few experience with Italian taxes because of my parents and because I always collected this kind of info.

 

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[ChrisPec]

What's the website about? Perhaps the purpose of your website may have had something to do with the shady advice you were given. In any case, sounds like complete BS.

No man, I explained above what those money are for, unfortunately it really is like this in Italy... About 5k if you are lucky and don't need an accountant, but there are a lot of expenses.
My website was about doctors and drugs, but not an e-commerce, so also if you gain from AdSense you pay a lot even before the beginning

 

[Simon Angel]

Because it is considered as an economic activity, even though you don't sell or make any money, so you must pay: a given amount in order to create the company (about 1k), 4k of euros per year also if you make nothing because they are mandatory plus expenses for accountant and IF you make money you have to pay other taxes. I have few experience with Italian taxes because of my parents and because I always collected this kind of info.

You don't need to register an entity to own a website, and even if you did - if nothing's going on, nobody would even notice you. If taxes in Italy really are as bad as you say I'd suggest creating a legal entity in another EU country e.g Bulgaria. However, you don't have to worry about creating your website nor using it to make money until your first 10k earned or so.

 

[ChrisPec]

You don't need to register an entity to own a website, and even if you did - if nothing's going on, nobody would even notice you.

Yeah, I thought this too ahahahah
I was trying to do it completely right but it seems totally insane honestly.

However, you don't have to worry about creating your website nor using it to make money until your first 10k earned or so.

Maybe I explained myself wrong, or I misunderstood what you are saying, but the website is the core of the business, it is not complementary or something more ahah

 

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[MJ DeMarco]

This doesn't sound right and the first I've heard of it. Anyone in Italy care to expand?

 

[ChrisPec]

This doesn't sound right and the first I've heard of it. Anyone in Italy care to expand?

I'd be really happy if someone prove that I am wrong ahahah
I actually hope so

 

[Serito]

Hi @ChrisPec , i'll tell you my experience.

I own an "S.r.l." (LTD) in Italy in partnership with another person.

Disclaimer: i'm not an expert, i suggest to take expert advice from an accountant.

Sorry for my bad english, some terms are taken from Google Translate...

Startup costs are roughly these:

1) notary and constitutive act: 1.500 / 2.000 euros - una tantum
2) 300 euros for "company books" - due every year
3) accountant: from my experience, vary from 1.000 euros (unlikely but possible) to 3.000 euros - due every year
4) i think there are minor costs that i'm forgetting (some 50 euros "stolen" from the government)

These are costs you share with your partners, if any.

Now, here's where i think the 7k comes from: working "administrators" of your company (likely YOU) have to pay for social security taxes a minimum of 3.500 euros/year no matter what your income is (it is roughly 900 euros every 3 months).

Yes, if you do 0 euros the first year, you'll have to pay (as person, not as company) 3.500 euros.

IMPORTANT NOTE: this occurs if your business is your MAIN source of income and if you work in your company. If you have a job and a side business, you don't have to pay this. If you do not work in your company, you don't have to pay this.

So, to sum up, upfront you'll have to pay costs 1) 2) and dealing payment of accountant; and be prepared to pay 900 euros every 3 months as a person.

Also, your have to pay a different amount (for social security taxes) based on your remuneration as administrator, known in Italy as "double imposition".

These are S.r.l.'s startup / fixed costs.

Again, i suggest you take advice from an expert, since there are other ways to start a business (S.n.c., simplified S.r.l, professional VAT number, ecc.) which are less expensive. Just choose the one that suits best.

 

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[MTF]

@ChrisPec refers to social security taxes and it's normal in Europe. If you want to start a business (even as a sole proprietor), you need to register it and pay social security even if you make 0. This isn't an income tax; it's a tax you pay to (supposedly) get social benefits (or in reality, pay for others, including current retirees).

But if you don't make any money and are okay not writing off any expenses, you don't have to register it until you start making money.

 

[ChrisPec]

Hi @ChrisPec , i'll tell you my experience.

I own an "S.r.l." (LTD) in Italy in partnership with another person.

Disclaimer: i'm not an expert, i suggest to take expert advice from an accountant.

Sorry for my bad english, some terms are taken from Google Translate...

Startup costs are roughly these:

1) notary and constitutive act: 1.500 / 2.000 euros - una tantum
2) 300 euros for "company books" - due every year
3) accountant: from my experience, vary from 1.000 euros (unlikely but possible) to 3.000 euros - due every year
4) i think there are minor costs that i'm forgetting (some 50 euros "stolen" from the government)

These are costs you share with your partners, if any.

Now, here's where i think the 7k comes from: working "administrators" of your company (likely YOU) have to pay for social pension (sorry don't know how it is named in english) a minimum of 3.500 euros/year no matter what your income is (it is roughly 900 euros every 3 months).

Yes, if you do 0 euros the first year, you'll have to pay (as person, not as company) 3.500 euros.

IMPORTANT NOTE: this occurs if your business is your MAIN source of income and if you work in your company. If you have a job and a side business, you don't have to pay this. If you do not work in your company, you don't have to pay this.

So, to sum up, upfront you'll have to pay costs 1) 2) and dealing payment of accountant; and be prepared to pay 900 euros every 3 months as a person.

Also, your have to pay a different amount (for social pension) based on your remuneration as administrator, known in Italy as "double imposition".

These are S.r.l.'s startup / fixed costs.

Again, i suggest you take advice from an expert, since there are other ways to start a business (S.n.c., simplified S.r.l, professional VAT number, ecc.) which are less expensive. Just choose the one that suits best.

@Serito guarda, da quanto ho capito sei italiano anche tu quindi possiamo tranquillamente parlare in italiano ahahah
Senza parlare di srl perché mi sembra fin troppo costosi, anche una semplice partita IVA mi costa 4k di contributi INPS ogni anno a prescindere dal fatturato più i costi per la registrazione alla Camera di Commercio e così via, praticamente ci sono quasi 5 mila euro di costi annui il che mi sembra assurdo, conviene a sto punto fare a nero per quanto possibile

PS: I'll translate what I wrote before. I didn't talk about SRL, which is the american LLC basically, because the costs will be even more, I was talking about VAT which costs me 4k per year for pension and retirement plus 1k circa for the registration of the entity. So it's not 7k but 5k actually

 

[ChrisPec]

@ChrisPec refers to social security taxes and it's normal in Europe. If you want to start a business (even as a sole proprietor), you need to register it and pay social security even if you make 0. This isn't an income tax; it's a tax you pay to (supposedly) get social benefits (or in reality, pay for others, including current retirees).

But if you don't make any money and are okay not writing off any expenses, you don't have to register it until you start making money.

Yes, I know that it's normal in Europe since I am italian, I was wondering if it worked like this also in other parts of the world, because in my opinion is crazy to pay that amount of money if you are creating a business from scratch and you don't make anything in terms of cash

 

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[MTF]

Yes, I know that it's normal in Europe since I am italian, I was wondering if it worked like this also in other parts of the world, because in my opinion is crazy to pay that amount of money if you are creating a business from scratch and you don't make anything in terms of cash

In the beginning years of my business I struggled just to pay social security taxes. I had to pay roughly 250 euros each month with 0 coming in. I was not only losing because of business expenses but also because of social security.

I believe it's common not only in Europe but also other countries with an extensive social security system.

So yes, it is crazy that you have to pay while you're not making money but it is what it is. Don't let it deter you from starting a business, though. As an entrepreneur, you'll have to learn that whether something is fair, crazy, [insert another judgment] doesn't matter. You have to make it work with the constraints you're given, regardless of how crazy they are.

Or you can move to a tax haven or a more entrepreneur-friendly country.

 

[Milton Iannella]

Hi guys!
I'm new here and I would like to create a website, but I had few questions to ask you because I'd like to understand if this is Italian problem or it's pretty much everywhere the same thing ahahah.
Basically in Italy if I want to create a website from scratch I should pay 7k of taxes per year even if I don't make money at all out of it, is it like this also in your countries? Because I wanted to start this website but I can't afford 7k in order to pay accountant, tax and other shit like this at the moment, I'm a student and I don't have a clue where to find those money lol .

Let me know everyone!

I’m Italian too. This seem like bullsh*t.

 

[RealDreams]

E' una domanda che mi pongo da 2 anni.
Se hai la possibilità di andare all'estero, fallo. Risparmi tempo e rotture di coglioni che sono solite qua in Italia.

 

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[ChrisPec]

In the beginning years of my business I struggled just to pay social security taxes. I had to pay roughly 250 euros each month with 0 coming in. I was not only losing because of business expenses but also because of social security.

I believe it's common not only in Europe but also other countries with an extensive social security system.

So yes, it is crazy that you have to pay while you're not making money but it is what it is. Don't let it deter you from starting a business, though. As an entrepreneur, you'll have to learn that whether something is fair, crazy, [insert another judgment] doesn't matter. You have to make it work with the constraints you're given, regardless of how crazy they are.

Or you can move to a tax haven or a more entrepreneur-friendly country.

Yeah, I know that I would have problem for sure, I was prepared for that but as I said in the first post I'm a student and I really cannot afford those money at the moment, especially with this pandemic... So I guess I'll just wait until I have some cash to invest. Thanks a lot for the answers anyway, I really appreciated!

E' una domanda che mi pongo da 2 anni.
Se hai la possibilità di andare all'estero, fallo. Risparmi tempo e rotture di coglioni che sono solite qua in Italia.

Eh infatti mi sa che mi toccherà farlo, purtroppo non sono veramente in grado di pagare tutti quei soldi al momento, specialmente con il Covid dato che sto aiutando i miei genitori con i risparmi che ho. Tu hai fatto esperienze all'estero? Nel caso ti vorrei scrivere in privato per avere informazioni

 

[Johnny boy]

When you start a tiny little 1-man business you do not need to hire a legal team, accountants, etc. That's stupid.

Just go get customers. Go get sales. Go get people to give a F*ck about what you're selling. Stop worrying about the admin bullshit until you're actually rolling along.

 

[MTF]

When you start a tiny little 1-man business you do not need to hire a legal team, accountants, etc. That's stupid.

Just go get customers. Go get sales. Go get people to give a f*ck about what you're selling. Stop worrying about the admin bullshit until you're actually rolling along.

This advice is spot on but in many countries around the world you're breaking the law if you do it without registering a company. The risk of getting caught is low, but it's there.

 

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[ChrisPec]

When you start a tiny little 1-man business you do not need to hire a legal team, accountants, etc. That's stupid.

Just go get customers. Go get sales. Go get people to give a f*ck about what you're selling. Stop worrying about the admin bullshit until you're actually rolling along.

Yeah except for the fact that if I get caught I could be arrested but yeah, sure. In Italy exists the 1 man business and it needs to be registered in order to obey the law, I'd prefer to not do this type of things out of the law.
Especially if we consider the fact that in Italy they are very strict on this kind of things, they control your invoices and so on

 

[Johnny boy]

Yeah except for the fact that if I get caught I could be arrested but yeah, sure. In Italy exists the 1 man business and it needs to be registered in order to obey the law, I'd prefer to not do this type of things out of the law.
Especially if we consider the fact that in Italy they are very strict on this kind of things, they control your invoices and so on

Shit sounds like tyranny to me. How do you tolerate that crap?

 

[RealDreams]

Shit sounds like tyranny to me. How do you tolerate that crap?

Personally, I don't. Starting a business here is a chore just for the fact that most of YOUR money go to the government without any explanation apart from "you know, you can't dispute the government" and for some apparent benefits the state provides. The sad thing is most people are so attached to the country that they can't see this reality.

 

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[Godmode]

Hi man, you may want to look into opening a p. iva in regime forfettario, which is ideal for individual people with an overall income of less than 65k € per year. It is not an LLC type of company.
I'm not an expert but I have looked online and found this relatively new type of business tax system, and I think it's the best for individuals in the first stage of opening an online business.
Plus, if you already have a full time job, you are exempt from paying the yearly 4000€ for the INPS (I assume this is because you are already paying INPS taxes on your paycheck), unless the income from your website ads or selling gets bigger than your job income.

I got this from a website:

La situazione che determina il maggiore risparmio, in termini fiscali e contributivi, riguarda un lavoratore dipendente full time che decide di aprire partita IVA come ditta individuale in regime forfettario. Ad esempio un lavoratore dipendente che decide di avviare un’attività di e-Commerce adottando il regime forfettario. In questo caso, fintanto che l’attività prevalente resterà quella di lavoro dipendente, sarà esonerato dall’iscrizione alla Gestione commercianti dell’INPS. Non dovranno essere versati i contributi fissi annui sul minimale pari ad € 3.900. Infine, potrà eventualmente anche usufruire del regime forfettario al 5% oltre ad usufruire delle detrazioni e deduzioni IRPEF per il reddito di lavoro dipendente.

Google translate:
The situation that determines the greatest savings, in terms of tax and contributions, concerns a full-time employee who decides to open a VAT number as an individual company on a flat-rate basis. For example, an employee who decides to start an e-Commerce business by adopting the flat rate scheme. In this case, as long as the main activity remains that of employee work, he will be exempted from enrolling in the INPS merchant management. The annual fixed contributions on the minimum amount of € 3,900 must not be paid. Finally, it may also take advantage of the flat-rate scheme at 5% in addition to taking advantage of the IRPEF deductions and deductions for employee income.

Hope it helps

 

[ChrisPec]

Hi man, you may want to look into opening a p. iva in regime forfettario, which is ideal for individual people with an overall income of less than 65k € per year. It is not an LLC type of company.
I'm not an expert but I have looked online and found this relatively new type of business tax system, and I think it's the best for individuals in the first stage of opening an online business.
Plus, if you already have a full time job, you are exempt from paying the yearly 4000€ for the INPS (I assume this is because you are already paying INPS taxes on your paycheck), unless the income from your website ads or selling gets bigger than your job income.

Yeah man, that is the problem actually... Since I am a student I do not have a job and I cannot afford 3.9k per year atm. Plus you're supposed to add another 1k for accountant and other kind of expenses like this

I was trying to get some information about other countries because this is insane, I can't pay 4 or 5k per year even if I don't make money out of it and I should add the 5% tax for the first 5 years if you don't overcome 65k of revenues per year, otherwise you pay waaaay more than that... That's fuc*ing dumb!

 

[YanC]

Well there is a good reason why English-speaking countries are doing great (US, UK, NZ, AUS), Northern Europe is doing well (Sweden, Germany, Denmark...) and Latin Europe is doing terrible (France, Italy, Spain, Portugal). This is a good illustration of it.

I guess it could be worse though. You're still better off trying to build a business in France or Italy than in Africa or Latin America...

 

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[Antti]

If you have an online business just move to a more business friendly country inside EU. Cyprus, Malta, Bulgaria etc. there are many options with much lower taxes and less bureaucracy.

 

[ChrisPec]

If you have an online business just move to a more business friendly country inside EU. Cyprus, Malta, Bulgaria etc. there are many options with much lower taxes and less bureaucracy.

Yeah, I guess that's what I will do as soon as I can...