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Italian prosecutors probe Meta for '870Ms EUR tax evasion'
- notlukesky 4y agoThere are clearly internal incentives to not pay taxes in local jurisdictions. Till there are penalties or clawbacks for employees or tax advisors this will go on all the time. Obviously small countries are routinely ignored and their only choice with tax evaders is to ban them outright.
- goodpoint 4y agoLarge companies know getting banned is extremely unlikely and that most fines are going to be less than a slap on the wrist anyways.
- yieldcrv 4y agoI disagree because its deeper than that, there are also external incentives and they are the laws of the local jurisdiction. One thing that might not be obvious if you haven't employed CPA and lawyers and really read the supporting regulations for their decisions is that... the government doesn't know what your legal rationale is. Read that again, the government does not know your legal position, they don't know if they are more correct or you are more correct. When you have privileged communications and multiple business entities, the government doesn't even have a way to know. (If they were "parallel constructing" then the case would get dropped because they know what you did was legal.) All they know is that whatever you did wasn't common and that they didn't get paid. Your legal position can be very accurate. It can be a matter for the legislature to change it if they really don't like it. But that has nothing to do with you. And this isn't just fishing for loopholes. There are many outcomes where the government finds that velocity in the economy is more important than their own revenue collection. They wind up incentivizing certain kinds of transactions and heavily taxing the rest of the transactions. Governments worldwide do this. We'll see how it pans out for Facebook, but there is almost no world where I would immediately lean towards the prosecutor's opinion just because a mega corporation or billionaire is involved.
- pmontra 4y agoVAT in Italy is 22%. So 870 M of VAT means that they sold for 3.954 B Euro in Italy in the 2015-2021 period.
- ipaddr 4y agoThis is about free accounts. There are 38 million facebook users in Italy now and 27 million at the time. They value each signup user is worth $104-146 in revenue to facebook over that time period which seems reasonable but high.
- ajsnigrutin 4y agoI have a company in a neighbouring country of slovenia... If I don't declare VAT, I get around ~30 days of leeway between the remiders to fines from our tax authority. If I didn't pay them for a year, they'd close my company for good. How the hell are they "probing" for stuff that happened 7 years ago? What were they doing in the last 6.5 years? Does an italian mom and pop pasta restaurant get the same 7 year time period before they get probed for not paying VAT?
- davidw 4y ago> 7 year time period Bureaucracy in Italy can be very slow indeed. Not sure about this case in particular, but sometimes things take years to happen.
- f6v 4y agoSome backscratching was done to make someone look the other way. Now a new government wants to shake Meta to fill the treasury. Just one possible explanation.
- Karliss 4y agoProblem for the Italian pasta restaurant is that they don't have dozens of offices and subsidiaries across the world made with intention to make it more confusing for tax authorities to understand what's going on and decide what fraction of their business and income belongs to Italy.
- Asdrubalini 4y agoEfficiency is not a known concept here in Italy. There are people/companies who get fined for paying taxes, and other people/companies who don't get fined for not paying them. There is no presumption of innocence when dealing with italian tax authority. And things are super slow.
- qsort 4y agoYeah the state of the country is just sad. And obviously like in every disfunctional company there are the usual gaslighting liars who insist it's just normal and it's like this everywhere. Pet theory: it's because not enough Italians speak English and Italy is the only place where Italian is a majority language. You end up with a culturally backwards country.
- TazeTSchnitzel 4y agoVAT evasion is not something you'd expect a large company to get in trouble for. Either the government is wrong or Meta really messed up?
- gizmo 4y agoEU countries bicker about VAT like schoolchildren. When Italy says VAT is due it might mean FB has been negligent, but it probably means FB made a deal with another EU country (Ireland perhaps) and paid a lower amount of VAT over there.
- TazeTSchnitzel 4y agoThat's not how VAT works… the customer's local VAT rate is the one that is used, not the merchant's.
- gizmo 4y agoNo, the EU has astonishingly childish VAT rules that specify which country is owed VAT at which rate for all sorts of edge cases, like an online purchase made from a train heading across a border. The vendor, the customer, and the train can represent up to four different countries, each of which can argue they are owed VAT.
- TazeTSchnitzel 4y agoThere are some exceptions but they're slowly being removed, and I don't think they would cover Meta whose business is entirely digital services?
- imiric 4y agoYou phrased that nicely. :) Large companies indeed usually don't get in trouble for tax evasion, but they are certainly the ones more often committing it. They don't call it "evasion", of course, but more like "tax minimization", or "using every legal loophole possible known to our army of lawyers". The only thing Meta messed up is maybe not being up-to-date with some obscure legal gotcha in Italy, and even so, the fine will just be the cost of doing business.
- elliotpage 4y agoGiven the degree of Tax Evasion in Italy it makes sense they would be investigating it - after all they are experts! Joking, of course.
- deleted 4y ago[deleted]