Few days ago, a friend sent me an email containing a link to this article. The article tells about Caprotti, the owner of Esselunga, a supermarket chain well known here in the north of Italy. Caprotti was complaining about his situation here in Italy, where the taxes are so high (Caprotti tells about 60%…but I cannot understand how) and the bureaucratic iter it's so long and unpredictable. Well, this article made me think. It's a common idea, here in Italy, that the best way to earn money and get better jobs it's to leave the country. The taxation it's so high that a lots of companies are refusing to grow and some other are dying under the fiscal pressure. It's a common idea and I wanted to learn more about this thing.
On Wikipedia, it's easy to find the list of countries by tax rates. I gave a look to the list and I suddenly discovered a thing. In Italy, all the people are complaining about the tax rates (both on individual and companies) and everybody wants to leave, but here, on Wikipedia, I see that European countries have (more or less) the same taxation. Italy has a rate of 31.4% on companies and a maximum of 43% on individuals. Yes, it's tremendously high, but take a look to France, or Germany, or Spain. In France we have a rate of 33.33% on companies and 45/75% on individuals (maximum). In Germany there's a rate on companies of 29.8% (average) and 45% on individuals. In Spain the taxation on companies is 25/30% and 52% on individuals. In Switzerland the rate on companies is around 25% (maximum) and 13.2% on individuals. Well, they're not so low after all.
I wanted to discover more, so I went to talk with a friend about those taxation and he confirmed that in Italy (for a manufactory industry) the tax rate it's around 27%, plus the extras (taxes on property, or employees etc) the total amount it's realistically around 31%.
I wasn't completely convinced, so I looked on the internet to have a more complete view on the situation. How the biggest companies do? How much taxes do they pay? I've found an interesting thing: the Tax avoidance. It's a sort of tax free tour, that lots of multinational companies use to avoid taxes in their origin countries. Basically, the major companies in the world use little societies to transfer money from their origin countries to fiscal heavens (like Cayman, British Virgin Island or even Amsterdam). This tour it's almost legal, that's why they call this method neutral taxation (polite way to define zero tax) and it's supported by bankers, lawyers and accountants. They use familiar advisors, as major consultant firms that follow the operations and guarantee for them. That's a (not really easy) way to avoid taxes. It's not correct, I agree, but many companies do that: they literally don't pay taxes, or well, they pay less than they should do in their origin country (taxation in British Virgin Island it's around 0%). How they do that? Simple, the money are always moving, through these little societies and so, magically, all the taxable profit are not made from Apple US but from Apple Cyprus where the tax rate it's around 10%. Attention, you'll never find the society Apple Cyprus if you search for it, the names are never similar to their holding company. So, the world it's full of little societies that have a capital of 1000$ but make millions of euros in transactions. That's true and (more or less) permitted. I admit that is a crafty way to avoid taxes even if I don't find it correct (see the video in the link above to understand better).
So, which is the conclusion? I've analyzed the different tax rates in countries near Italy, and I've seen that are (more or less) the same. There's not a big gap between the central European countries, only in Switzerland the taxation on individuals is quite low. I haven't analyze the taxation in countries like Poland or Ukraine, because moving a company in these country presupposes a speech much wider linked to quality, lifestyle and so on. In conclusion, I don't agree with all those people that criticize Italy, dreaming about a job abroad. Well, after all they're making a good choice because they're going to have new experiences and maybe a wider point of view, but guys, don't complain about our situation. The tax rate it's high, very high, but not only here in Italy. People should leave if they cannot find a job here, because they've studied for a complex job that's available only in certain country (for example a work platform for the extraction of oil); or people should certainly leave if they cannot survive here. But, stop a moment and think, would you leave your friends, and your families for a minus 3% on tax rates?
It's better to stop complaining and start to think about the future, start to work and make better and more solid industries, work with international markets and start to realize that nothing it's impossible, also here. I think it's possible. I see people around me (even people of my age) that make it possible.