Saturday, 16 December 2006

Foulmouth Car Park

Recently an elderly friend and her daughter visited the UK for a holiday, touring by hire car along the south coast. They are from the most northerly part of Italy where the first language is in fact German because the region was, until the end of WWI, the southern part of Austria.

Anyway, they eventually reached Cornwall and the town of Falmouth. They found a spot to leave the car in a busy car park and as she was opening the passenger door another car arrived, in the space next to them, so she quickly closed the door again to avoid causing any damage to their hire car and therefore losing the £500 deposit. The next moment an even older man appeared at their windows, red-faced, angry, and spitting foul obscenities at them. They got out to see what the problem was only to discover that he was accusing them of putting a scratch down the side of his brand new car of 3 weeks. His anger may have been understandable if the damage had in fact happened right there and then, however there was no contact at all between the two cars. The man's wife stood shrugging shoulders but called the police following the irate instructions from her husband who had now realised he was facing German tourists who were obviously ignorant, arrogant and in stubborn denial of damaging his car.

When the police arrived, they greeted the man as if they new him, and started taking notes of this dasterdly deed done by the foreigners. He went on to say that he had spent all his life savings on the car and that these Germans had driven into him. They didn't bother to ask the visitors of their account of what had or hadn't happened, so instead the daughter tried to offer it to them only to be told that the officers knew him to be an expert in this matter and trusted his word. Now, would it be cynical of anyone to think that this seemed like a stitch-up?

The daughter, who understood English very well, realised that she had to do something and asked the policemen to actually inspect the damage to the mans car, but they repeated that he's an expert in this matter and they believed him. So she gently squeezed one of the policeman's arm and politely guided him to the damaged area of the car and with a wet finger wiped away the dirt... "there", she said, "the damage has now gone, it was only dirt!"

Outrageously, there were no apologies from either the elderly man or the policemen. Who was this man? What kind of 'expert' was he? Did he own a car-body repair business? Was he a well known driver? An important politician? Rich? Or was he just a silly old man who has lost his marbles? Why didn't the Police look at the damage first (why were there two of them anyway)? And finally, how can someone who has made that mistake and screamed blue-murder at a total stranger not even accept his own mistake and apologise. The car should be taken away from him since he is in no fit mental state to be in possession of a driving license. Fancy that, spending your life savings on a car.

Tuesday, 12 December 2006

Better Wait for a Better Beta

Update: 29.12.2006
Blogger is no longer a Beta however I still have the same bugs as mentioned in the original text below. Apparentely there are known issues with Safari which they say are working on... we'll see how long it takes....

This new all singing all dancing Blogger, seems to be an improvement... however, it is only a Beta version and I'm surprised that it is not possible to sign up with the previous version. I say this because here I am trying to create content on my new page and none of the "configure" pop up windows (that I have so far tried) do what it says on the can.

For example the form to upload an image (of only 20k) just hangs forever, so as an alternative I tried putting the URL of an existing image on the web and "save changes" only to get an error message telling me to "Please specify an image" Huh? Isn't that what i just did.

I'll pop back sometime in the not too distant future to see when the Beta has become better. This was first published a month(ish) ago, no change yet.

Christmas is Cancelled

Yes, this Christmas is cancelled. It sounds like the title of a new book, and maybe it will be, with a subtitle of 'So you want to live in Italy'. This is due to the combined efforts of my Italian accountant and the Italian fiscal system. They have done very well and, no doubt, will be celebrating yet another joyous occasion, laughing and stuffing themselves on the ever-so-easy-to-come-by proceeds of us plebs.

In 2006 the tax rate for an individual is between 23%-43%. In addition to this direct taxation (IRPEF), there is also local tax (IRAP) which self employed individuals are taxed at between 3.25% - 5.25%.

The tax year in Italy ends on December 31st. Advance payments of tax are made on the following basis.:
A Self-Employed Individual is obliged to pay 100% of the tax forecast for a year, or an amount that is the equivalent of 98% of the tax paid in the previous year, whichever is the lower, the pre-payment is made in two installments - 40% by June 20th and 60% by November 30th, thereby squashing any festive spending. The date for filing an annual return is July 31 (post my birthday).
Fines are imposed for arrears in filing an annual return at the rate of 120% - 240% of the tax, depending on the length of time that the return is in arrears.... plus interest. It is more than likely to be the higher rate since they will not send you the notification or indeed the fine until at least 4 years later, earning themselves another hefty wedge in interest on outstanding payments.

For a self-employed person the rate of payment is 20%, this is paid (in theory) by the client directly to the taxman. If they don't pay this then the fine plus interest comes to you, not the client. So you have to call and check with every client to make sure they do this. Apparentely 30% of a self-employed person's work time is used up creating paperwork or chasing it, or explaining it to someone else to do it and the chasing for you.

Ha ha ha ha

At least, in this autonomous region, new businesses can benefit by receiving up to 30% of any capital investment. Applications can be made through an accountant as long as the total amount of expenditure exceeds 10,000 Euro. The applicant is then informed that he needs to wait a number of years to see if there is any money left over to fulfill their promises and for any funds to be given to you. Meanwhile the applicant pays hefty fees to the accountant (he won't wait that long) for organising it for you, it is best if one sits down before reading his invoice. It has to be said that IF any of the money does indeed get refunded, it will probably cover the accountant bills... and is probably liable to further taxation as an income.

INPS - (National Insurance contributions)
Self-employed have to pay 18% (27% in 2008) of their earnings to INPS as pension contributions. 4% can be "clawed-back" from their customers by adding it to the subtotal of the invoice (Note; this is then totaled BEFORE the VAT is calculated, therefore they also make VAT on your pension contributions!). Self-employed pay the highest % of INPS but are NOT entitled to sick and unemployment benefits.

LA COMMERCIALISTA (The accountant)
It is not possible to NOT have one of these. They know it... they have an organised monopoly, and the latest trade mans' list of highest earners in this region are indeed solicitors, accountants and pharmacists. It's easy to see how these are connected... the first two know everything they need to know to avoid taxes and raise their fees and the third is where everyone else goes after paying their tax bills and accountants fees.

If one was to earn 30,000 Euro less expend. of say 12.000:
Income tax = 6,000
IRAP = 1,200
INPS = 5,400
Advanced payment for following year (tax and INPS) = 11,100
Balance = -5,700

So for a honest person to live, pay the rent and bills, put food on the table, etc., they would have to make another 15-20,000 undeclared... become a criminal so he can pay the criminals.... or of course don't work for yourself and get a job for life with the government. Either way you are no longer honest.

Romano Prodi's government won elections in April by promising to improve Italy's finances... so they've increased taxes even more as a way to reduce the country's deficit whilst not doing anything about state spending. The extra revenue will go towards paying for more police, possibly to track down more tax dodgers. Italy currently has the highest debt levels in the European Union, and is third in the world behind Japan and the US. It's politicians and EU politicians are the highest paid in Europe. It's taxes are just about the highest in Europe... here's where they spend it ...
Lamborghini Police Car Speeding

They voted unanimously to give themselves a raise of 1,350 Euro a month. This was disguised in a way that it would not be recorded in official reports. This was added to their salary of 19,150 a month to which they add their base salary(?) of 9,980 a month, plus an allowance for their family of 4,000 and reimbursement of rent of upto 2,900 a month, plus something called 'indennita' di carta (whatever that is) of 335 to 6,455 Euro.

Earning so much money must be hard work because after 35 months in parliament they can retire with a pension paid for by the 35+ years of contributions from the rest of the population. Even if they take a pension of 25% of their earnings, whilst in parliament, it amounts to over 7,500 Euro per month, and if they retire at 40 then they will have had over 2.2million Euro by the time someone else of the same age makes retirement at the age of sixtyfive. Pension funds abuse perhaps?

What DO they spend their hard earned cash on? They ate and drank for free to a tune of 1,472,000 Euro (1999), and received 103,000 in reimbursed electoral expenses. They also receive free of charge: mobile phones, cinema tickets, theatre tickets, bus travel, postage stamps, national air flights, autostrada pass, swimming pools and gyms, train pass, clinics, accident insurance, life assurance, car with driver.

So if you were expecting a christmas card this year, please send your requests to:

Romano Prodi and cronies
The Legalised Mafia
Tax Office of the Presumed Guilty until proven Guilty of not paying our wages

Cost of living is low in Italy only if you are a visitor, but once you live here it's one of the highest costs of living in Europe. Maybe this is why the government is introducing a new tax of up to 5 Euros for each tourist to enter certain towns, they expect to earn 30 billion Euros from tourists this year alone... but don't let that put you off coming to see us.

Merry Cancellation and a Happy Tax-free New Year!!