Setting up a business in Italy

Dear Readers,

I was recently contacted by a lady who has got into very big trouble for operating a business from the UK when her main centre of business activity was in Italy.  She explained that she had taken advice from many people (including verbal confirmation from the Guardia di Finanza) who all advised her incorrectly about how to set up a business correctly in Italy.  Below is an extract which she asked if I would communicate to the wider Expat community in Italy to try and avoid it happening to others.



British resident in Italy? Beware -  not to get caught up between two EU states

I have run a very successful language school in Trieste for 8 years.

Five years ago my Italian accountant verbally advised me as being British I should be registered in the UK. 

The UK accountant agreed.  I am registered as a sole trader, vat exempt for education, all taxes and contributions paid in the UK since 2008. The staff and myself paid according to the UK accountants instructions.

In 2008, I asked the Guardia di Finanza if I was fiscally in order, three days later, verbally,  I was told ..yes.

Any advice you receive in Italy..... be sure to get in writing

Not only have we taught English in Italy but the main volume of the work was organising study holidays to the UK, Malta, Ireland, Barbados and USA. 

We taught in-house in Italian state schools and organised one week English study holidays for almost all liceo in Trieste and other schools in Friuli Venezia Giulia. Italian state schools received my vat exempt invoices for years and the children of the Guardia di Finanza studied and travelled with us year after year. 

Never a word said to indicate something was not in order.

May 11th 2012 the Guardia di Finanza raided the school whilst I was putting together a study holiday overseas.  

Now all of a sudden I am being accused of fraud, tax evasion, not paying IVA and paying the casual labour 'in black'.

My assets are blocked awaiting the outcome.

The Key being .........  if you are resident in Italy, you are liable to Italian Tax Laws 

 The human error being the ill advise of both accountants and the verbal confirmation at the Guardia di Finanza.......... and mine for following their advise.

You are on your own

Now made homeless, unemployed, penniless, I have found no help for British citizens with legal tax problems overseas.

It doesn't seem to matter that UK taxes are paid and I have been bringing hundreds of thousands of pounds of business into the UK.

It is so easy to prove that there was no intent.  Our photos, names and prices of services are on a huge poster in the front window of the school and over the web site www.experienceenglish.eu.  You don't do this if you are paying back handers and not paying taxes!

The bottom line is that I have to pay an Italian Lawyer. 

As everything has been taken away from me, I don't have the 20000.00 euro upwards they are asking for. 

Legal Aid Britain does not cover court cases outside the UK.

Legal Aid Italy does not cover tax cases.

So far, I have not found any way to defend myself.

 Get everything in writing, check your legal and financial position in Italy regularly, (Italian laws change regularly and without knowing you may be breaking the law) and not with just one or two advisers, but several.

Dianne Thomas

You can contact me on gareth.horsfall@spectrum-ifa.com or 3336492356, for more information.