SMEs pay 19 billion more taxes than the big names on the web
“In 2020 (1) , annus horribilis for the Italian economy, our small businesses with less than 5 million euros in turnover paid 19.3 billion euros in taxes (2). In 2021 (3), on the other hand, the 25 Italian branches of the main global web and software groups (WebSoft) paid our treasury 186 million euros (4). Although they are different years, this comparison shows that in the last year in which the data is available, our small entrepreneurs paid 19.1 billion more than the web multinationals present in Italy. Amount, the latter, certainly undersized. When the tax revenue from small businesses for 2021 (5) becomes available, the change will certainly be higher than the one mentioned above”. To say it is the Research Office of the CGIA. “The result of this comparison highlights a very obvious contradiction: held up as being primarily responsible for the tax evasion, people with VAT numbers, on the other hand, pay a total amount of taxes 104 times higher than the main web giants who, in the collective imagination , represent success, innovation and the future”
Let’s see the analysis of the CGIA.
The economic weight
The aggregate of subsidiaries belonging to the WebSoft sector recorded a turnover in our country of 8.3 billion euros in 2021; the number of employees employed in these realities was equal to 23,000 units and they paid only 186 million euros to the Italian tax authorities (6). The 3 million small businesses with less than 5 million in turnover, on the other hand, in 2020, the year in which many of them were even closed for many months due to Covid, generated a turnover of 735.8 billion and the tax contribution paid to the Treasury amounted to 19.3 billion euro. If the average level of taxation of big tech is 33.5 per cent, according to the Mediobanca research area, in our very small companies it is around 50 per cent: practically almost double. Now, no one is asking for a tightening of the tax burden on large web companies, God forbid, if anything, it is necessary to drastically lower the burden of taxes on small businesses which, even today, remains at unbearable levels. What are the reasons why the subsidiaries present in Italy of the main multinationals of the web can benefit from a tax rate of 33.5 percent? For the simple reason that around 30 percent of pre-tax profit is taxed in countries with reduced taxation which gave rise to cumulative tax savings which, in the period 2019-2021, amounted to over 36 billion euros.
The Cgia suggests some solutions. A first could come from the application of a minimum tax rate of 15 per cent for multinationals with turnover exceeding 750 million euros. The measure, introduced by a European directive last December, will enter into force from 2024 to ensure that large groups pay a minimum effective tax burden, limiting the transfer of profits and competition between countries to apply lower rates. The measure will apply to any large group, both national and international, with a parent company or subsidiary located in an EU Member State. The introduction of this measure should allow our treasury to collect an additional 3 billion. However, it is not only the foreign giants of the web who are taking advantage of the advantageous taxation granted by many European countries. For some years, in fact, even some large Italian players have transferred their tax or legal headquarters, perhaps only of a subsidiary, abroad. Many of these have decided to move their registered office to the Netherlands, for example, because there it is possible to benefit both from very favorable corporate legislation – which allows historical shareholders to have double the votes in the meeting, a way that allows them to better defend themselves from possible takeovers by foreign investors – and, possibly, of a rather generous tax treatment, which the Dutch government reserves for every big company willing to open its tax office in Amsterdam. With these operations, formally impeccable from a fiscal-corporate point of view, however, the taxable base of those who pay taxes in Italy has been reduced, penalizing, as we have seen, in particular small and very small entrepreneurial realities which, unlike large companies, they don’t have the possibility to leave their bags and weapons and move elsewhere.
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