Why finding a good commercialista is vital to life in Italy

Living in Italy is never easy.  But living in Italy with a bad commercialista is disastrous as one couple found out, to their horror.  Their real life tale is told below.

Having set up a home and a business in Italy five years ago we had encountered dozens of professionals, the traditional professions - engineers, architects, lawyers, doctors and accountants but we had yet to come across a professional professional. It probably doesn't help that we live as far south as you can go in Italy, where the concept of responsibility doesn't exist but is it really that much better in the north? It’s taken four architects, two engineers and two geometra's to get our modest house “sanitized” but the most dangerous professional, in our experience, the one who can wreak the most havoc, remains the accountant.

Five years ago we naively believed that if we conducted our financial affairs honestly and paid our taxes we wouldn't have any problems with the fiscal state.WeI read the books on how to set up a business in Italy, we talked to local lawyers, we sought recommendations for a good accountant and finally opened a B&B. Which is something we had already done on a much grander scale in the UK so I thought it was no big deal. We are sole traders, with simple book-keeping and just the usual end-of-year accounts to file,  so we weren't afraid of the Guardia di Finanza, why should we be? We had not done anything wrong.

It didn't occur to us to be afraid of our accountant.  OK, we were on our third accountant by this stage - the first advised us not to worry about taxes so we ditched him, the second made a couple of errors in the bureaucracy of setting up our business which caused the B&B to be closed by the police the day after it opened, so we ditched him too but the third we trusted.  A couple of tax years later and we see what a fool we have been.

Although number three correctly declared our earnings and capital, he omitted to declare bank transfers. Surely a mere clerical error on his part and no harm done since the relevant capital was declared? Sadly not, he bears no responsibility for the error and we are looking at a fine with six zeros on the end, which is several times the value that was moved around.

The Associazione Italiana dei Dottori Commercialisti (Italian Association of Accountants) are arguing that such innocuous omissions on the RW (tax-return) should be penalized with a fixed fine of 258 euro rather than financial ruin.  And it looks like the Agenzia delle Entrate, however reluctantly, are working towards a more sensible resolution before Italy gets walloped by an EU infraction order and insane fines of their own to pay.

In the meantime, what can you do in the face of a financial tsunami? Keep Calm and ci difendiamo.

The Spectrum IFA Group (Italy) works with a commercialista studio which is competent in advising expats and the International community in Italy on cross border tax regulation.  If you would like to know more then you can contact us on gareth.horsfall@spectrum-ifa.com or call cell 3336492356.