Italian prosecutors seek trial for Amazon, 4 execs in alleged $1.4B tax evasion
180 points - today at 3:34 PM
Sourcemesmertech
today at 4:17 PM
As a solo indiehacker in Europe, its crazy that I have to be so worried about VAT related things and big tech just goes around the whole thing and doesn't even expect to be charged just fined
amarcheschi
today at 4:19 PM
Well, for once execs are being investigated as well
You only have to be worried if you're doing something illegal, like the guys in the article. Misfiling something won't land you in jail, just some fines at the most. Intent matters quite a bit.
vjvjvjvjghv
today at 6:05 PM
“ just some fines at the most. “
That’s ok for the big players with deep pockets. For the little guy this is a much bigger problem. As it should. It would just be nice if law breaking would be a bigger problem for the bigger companies too.
I think GPs point is that the fines are generally not crazy.
I misfiled stuff a few times and got fined, it's annoying but it's not something that will break your bank.
The behaviour of the tax office varies quite a lot from country to country tho.
pocksuppet
today at 7:19 PM
Yes. No country is out here destroying productive businesses because they made a paperwork mistake. The penalty is usually proportionate.
But don't trust me, ask your lawyer.
> No country is out here destroying productive businesses because they made a paperwork mistake.
New Zealand. The Accident Compensation Corporation, a compulsory insurance scheme, is absolutely feral. Will crush you "because rules" without a thought.
pocksuppet
today at 7:39 PM
What were the rules you broke, and what was the penalty?
I've misfiled several times due to being young and stupid.
Each time I got a piece of mail asking my to call the IRS to clear it up, and every time the agent was nice and very helpful clearing it up, and not fined.
bluefirebrand
today at 4:54 PM
When you're not wealthy, "some fines at most" can be a really nasty setback
No really the fines in line with the profits and your intent.
Businesses who get into trouble because of taxes are doing it intentionally. Or somebody in the company does it intentionally.
Let me guess. Jeff/Andy make a donation to a certain someone. Tariffs on Italy are threatened. Case is dropped.
robtherobber
today at 4:27 PM
I think that normally that may be the approach (and I'm not singling out Italy for this, it probably applies to most countries).
On this occasion, however:
> In all previous cases involving other international groups, once a settlement was reached and payment made, prosecutors closed related criminal investigations, either through plea deals or by dropping the cases.
> This time, however, Milan prosecutors did not share the tax authority's approach and decided to press ahead with their probe, leading to a request that the suspects be sent to trial.
mr_00ff00
today at 4:47 PM
Damn, is anyone an expert that can speak to the criminal law involved here?
It’s crazy that executives can jump around the law and not face any criminal charges, then the company picks up the bill (although I’m not ignorant thinking this isn’t usual)
I’m just curious to learn more about how often this is the case and you usually what happens with people afterward
limagnolia
today at 5:41 PM
I don't know about Italian law, but in the US tax evasion is pretty difficult in many cases to prove. It is illegal in the US to deliberately defraud the IRS to evade paying taxes, it is not illegal to make a mistake, or claim a deduction you think you can claim when the IRS decides you can't, etc. So prosecutors must prove you had an intent to evade taxes you knew you owed. Because they can rarely meet that bar, criminal charges are rarely brought.
In Italy, if you are charged of tax evasion, you need to demonstrate that you are not evading. It's called "inversion proof"
nobodyandproud
today at 5:04 PM
While I share your sentiment, perhaps its better that it remain murky to give prosecutors a chance to succeed.
It usually works more like:
- we want 1.4B, but it will take 10 years in courts
- best I can do is 800M (or even lower)
- ok, we'll take it
source: I'm italian and many tech giants did this already. Apple opened an academy in Naples too.
epolanski
today at 7:35 PM
Not only tech giants, everybody from celebrities to random Joes can get away with it.
My mother's husband owed 70k+ EUR in taxes and at some point the judge proposed and he agreed to 2800 euros.
The trick is to not have a bank account in your name only, you have it joint with a child/spouse and they can't take your money. Nor they can take your house, if you only have one.
Eventually under those situations the judges try to take anything rather than nothing.
I'm not defending this situation, just saying it's widespread and the fact that every two governments come one that does a "condono", which is essentially "let's agree with tax evaders for some 50% of the tax they owe so they are happy and we see something" doesn't help.
Harsher punishment should be warranted, but you can't go to prison for tax evasion.
You 100% should be able to go to prison from tax evasion. Not to fill prisons just to line prison owners' pockets like in the US, but definitely have the possibility for egregious offences.
"Tariffs on Italy are threatened. Case is dropped."
Justice is independent in most EU countries.
But I think tariffs cannot be imposed on individual countries in the EU. At least that was how I understood the situation with Spain.
that is also true. Doesn't really stop Trump from threatening to do it all the tim tho.
Nothing stops that man from saying anything, he himself the least.
There's quite a few asterisks that need to be appended to "independent".
gpderetta
today at 5:04 PM
It is quite independent in Italy actually. The government is pushing for a constitutional amendment to help "fix" this feature. There is going to be a referendum on the change very soon.
jonathanlydall
today at 5:33 PM
I have ancestral Italian Citizenship but have never lived in Italy.
I am occasionally called upon by the local consulate to perform my civic duty and vote.
Just this week I sent them back my ballot, now marked, for this referendum in a sealed envelope.
This referendum required me to dig more deeply than usual into Italian politics before I could decide which way I wanted to vote.
mr_00ff00
today at 6:53 PM
I am familiar with this but thought it was for separating prosecutors from judges?
Is this some indirect effect of that?
the current reform is complicated, and reasonable people can disagree on how to vote, but it goes a bit further than separating prosecutors from judges.
Namely, it also changes the self-regulating body (the CSM, Consiglio Superiore della Magistratura) of the judiciary so that the government and parliament have a bit more authority and the judiciary have a bit less: the organ is split in two, its judiciary members are no longer elected but picked randomly while a part is decided by the political side, and there's an even higher special tribunal.
Proponents say this is necessary, opponents say this is leading towards stronger power of the political majority over the judiciary.
> while a part is decided by the political side
Now, roughly one third of CSM members is nominated by the Parliament and the other one is elected by judges, according to the "correnti" (a sort of parties)
> The government is pushing for a constitutional amendment to help "fix" this feature. There is going to be a referendum on the change very soon.
Italian here.
It's not like that: the referendum is about definitely enforcing the career separation about public persecutor and judges.
Actually they are under the same authority and the member of this authority are elected according to a sort of political parties (unique case in the whole EU) and this creates some distortions in career growths and nominations.
The new schema will create two different authorities and the members will be selected according to a ballot.
A similar proposal was made by the left wing parties few years ago, when they were at the government
Honest sellers pay VAT, and scofflaws get sales. Yeah they gotta throw down the gauntlet here or else VAT is only for suckers.
It would be really nice to have a few relevant numbers in the article for context.
If this is just from foreign sellers operating on amazon.it, then 1.4B of evaded taxes sounds like a lot to me, because the total revenue should be well under 50B/y, so this would be a significant fraction of total sales tax (and I'd expect most sellers to not be foreign and thus unaffected).
Would be quite nice to see rich people held accountable for once, curious how this will go.
philipwhiuk
today at 4:33 PM
> and I'd expect most sellers to not be foreign and thus unaffected
Most sellers probably are foreign.
Billionaire doesn't pay tax: let's settle with you paying half of all stolen money as a fine and we'll drop the case.
A regular citizen doesn't pay tax: lets jail or deport you, bar the entry for a decade, take away your home, car and anything you own in general and make you unable to find job for the rest of your life. Also your tax is double that of the billionaire, glhf ;) .
In Italy, the only entities consistently paying taxes are large corporations. Literally everyone else is constantly evading them.
As Italian, I really disagree. The only entities that pay all the taxes are employees because the taxes are collected directly from the salaries.
Big companies have the opportunity to make tax elusion (there is a reason why many Italian companies have legal HQ in Netherlands or Luxembourg), small companies, artisans and freelancers usually avoid to pajly VAT
https://academic.oup.com/book/36357/chapter/319888230#426336...
> In percentage terms this means that during the 1970s between 15 and 20 percent of Italians evaded taxes while the rate climbed to 26 percent in the 1980s. In the 1990s, tax evasion fell again, hovering between 15 and 20 percent. Workers employed in manufacturing evade very little, whereas the highest evasion rates can be found among the self-employed
> The severity of evasion becomes obvious when we consider that the Italian state annually collects only a total of €350 billion while losing €250 billion through evasion (D’Attoma 2016).
> If one asks Italians why they evade taxes, they primarily say that they evade because everyone else does so
> A distant second is the reason that Italians would be more likely to pay taxes if they had the feeling that the state would spend their money more wisely. Much lower in the ranking come issues such as the soft penalties for evasive behavior, the complexity of the tax rules, and the unlikeliness of being caught. A total of 87.1 percent of all Italians think that their fellow citizens evade taxes
randoments
today at 6:28 PM
as a freelancer i must be doing something wrong then.
Actually, you're doing something right. Everyone else is doing something wrong.
newswasboring
today at 6:57 PM
Taxes dont get deducted from people's salaries?
they do, the above comment is a generic populist rant
htx80nerd
today at 5:53 PM
Rich people provide huge economic stimulant to the economy in many different ways.
RankingMember
today at 6:59 PM
Even if evidence did agree with this uncited, broad assertion (I've seen nothing to that effect), it'd still be an indefensible justification for inequity in punishment.
> I've seen nothing to that effect
Even if billionaires don't pay income tax and are only taxed occasionally when they sell assets, there isn't much doubt that the corporations they create and invest in generate massive amounts of tax revenue in the countries they operate. Not to mention all the revenue generated from property tax, income tax from their employees getting paid by the company, local fines and fees, sales tax, import duties, etc.
You can want the super wealthy to pay more tax when they sell stuff to fund their lifestyles, but that doesn't mean their work isn't generating large amounts of economic activity which turns into tax revenue for governments.
How is it that concentrating wealth in private pools is better than spreading it around?
> the corporations they create and invest in generate massive amounts of tax revenue
Economic activity does generate tax revenue, billionaires generate economic activity. But if we took the billions (leave them millions, gready as they are) and spread it around it would have the opportunity to generate much more economic activity
The concentration of wealth, and the resulting concentration of income and widespread middle class impoverishment is catastrophic for our economy.
It is why, in real terms, incomes have been static for thirty years whilst the size of the economy has roughly doubled
So do poor people. Apply the law equally.
The sources for that are plenty of billionaire-funded think tanks. Don’t worry there are sources.