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Italy tops the table for tax dodging in Europe – again

The amount of lost VAT revenue in Italy was once again found to be the biggest in Europe, with the UK in second place.

Published: 10 September 2020 15:44 CEST
Italy tops the table for tax dodging in Europe - again
Photo: Ina Fassbender/AFP

Italy held on to the top spot in Europe’s rankings for VAT evasion once again, the European Commission said on Thursday.

The Italian state lost 35.4 billion euros in dodged VAT revenue, marking the biggest loss in absolute terms, according to a new EC study.

The figures, the most recent available, dated from 2018 and so were not impacted by the coronavirus pandemic.

Lost tax revenue in Italy was up from 35.3 billion euros in 2017.

The United Kingdom was in second place with a loss worth €23.5 billion, followed by Germany with €22 billion.

As a percentage, Italy’s tax gap was fourth-biggest at just over 24 percent, behind Romania (33.8%), Greece (30.1%) and Lithuania (25.9%).

“Today's figures show that efforts to shut down opportunities for VAT fraud and evasion have been making gradual progress – but also that much more work is needed,” commented Paolo Gentiloni, EC Commissioner for Economy.

“At this time more than ever, EU countries simply cannot afford such losses,” he said, urging countries to “step up the fight against VAT fraud with renewed determination.”

READ ALSO: Could coronavirus push Italy to adopt card payments at last?

Prime Minister Giuseppe Conte is looking at introducing measures encouraging electronic payments as part of his Progetto Italia Cashless, or Project Cashless Italy. 

Following the meetings on Tuesday, Conte spoke of the “importance for the country of encouraging everyone to use digital payments.”
 
“It will not only mean making the payment system more efficient, more transparent and traceable: it also means laying the foundations for recovering the underground economy, discouraging payments 'in the black'.”
 
Some studies estimate that up to 86 percent of all point-of-sale payments made in Italy in 2018 were in cash – the third-highest in Europe after Spain and Greece, where the figure is 87 and 88 percent respectively.
 
This compares to just 15 percent in Sweden and 34 percent in the UK. 
 
Photo: AFP
 
Several measures encouraging cashless payments were included in the 2020 budget last November, including the promise of tax incentives for those who pay by electronic – and therefore traceable – means, as authorities try to tackle widespread tax evasion.
 
The government also stated it would slash the maximum cash payment allowed from the current 3,000 euros down to 1,000 euros by 2022.
 
Italy has long been relatively resistant to adopting forms of cashless payment. But ministers may now be hoping that the public is more open to switching to electronic payments – either due to hygiene concerns, or after shopping online for the first time during lockdown.
 
As elsewhere in the world, some Italian shops and businesses had already taken it upon themselves to start asking customers to use contactless payments to avoid handling bills possibly touched by an infected person.
 
This includes payment via apps in some restaurants, as well as requests for customers in shops to use contactless payment methods.
 

 

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MONEY

Bonus asilo: How to get help with the cost of childcare in Italy

Parents of young children in Italy can get up to 3,000 euros towards nursery of kindergarten fees. Here's how much you may be entitled to and how to claim in 2023.

Published: 24 February 2023 12:45 CET
Bonus asilo: How to get help with the cost of childcare in Italy

Although the cost of childcare in Italy is lower on average than in some European countries, it still adds up to a significant cost for working families.

Parents in Italy spend a monthly average of €303 per child for a full-time place (around ten hours a day, five days a week) at a public day nursery, or asilo nido, and an average of 324 euros a month for a place in a public kindergarten (scuola materna or scuola dell’infanzia), according to the latest available figures. 

READ ALSO: How does the cost of childcare in Italy compare to other countries?

Fees are generally higher in northern regions, with the highest monthly nursery fees of all recorded at 515 euros in Lecco, Lombardy.

But help towards the cost of childcare is available in the form of a bonus asilo (‘nursery bonus’), which can be claimed by families of children in public daycare facilities, or in contracted private ones.

Since the measure was first introduced in 2017 – and expanded in 2020 – Italy has provided childcare benefits for parents of children under the age of three, with the aim of boosting Italy’s declining birth rate by supporting more parents in going back to work.

READ ALSO: How much does it cost to raise a child in Italy?

The assistance remains in place for the 2023 school year, with parents able to claim anywhere between 1,500 and 3,000 euros depending on their income bracket.

Eligibility

Parents of children who will be aged three or under from January to August 2023 can claim childcare government assistance, including foster parents.

While the upper limit of 3,000 euros is only for households on the lowest incomes, there’s no upper limit, so every family is eligible to receive at least a 1,500 euro payment.

The payment applies either to nursery care costs or to private childminder fees in the case of children with health conditions that would make it unsafe for them to attend daycare with other children.

How much you can claim

The claimable amount depends on families’ economic situation, which in Italy is calculated as ISEE (Equivalent Financial Position Indicator). The following subsidies are in place:

  • Families with ISEE under 25,000 euros are entitled to an annual budget of 3,000 euros.
  • Families with ISEE between 25,001 euros and 40,000 euros can claim 2,500 euros. 
  • Families with ISEE over 40,001 euros are entitled to aid worth 1,500 euros.

Find out more about your ISEE and how to get it calculated here.

The funds apply to each child in the household that falls in the age range; so for two children under three, the amount of assistance is doubled.

READ ALSO: How much maternity, paternity, and parental leave do you get in Italy?

You can only claim up to the total amount of nursery or childminder fees charged for the year.

When and where to apply

The bonus asilo for the current school year must be requested by midnight on December 31st, 2023 through the INPS website.

Parents with young children in Italy can claim up to 3,000 euros in childcare support. Here’s how to go about it.

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