B. AN INCENTIVISING SYSTEM SIMILAR TO THE BELGIAN MODEL: 10% FLAT TAX FOR INCOME UNDER EUR 10,000
The tax advantage consists of a reduced tax rate of 10% applicable to income under EUR 10,000, which would constitute a new income category.
The first sub-paragraph of Article 12 provides that income received by users via digital platforms, referred to as income from non-professional activities of the collaborative economy , is declared in a special section of the income tax return. For income up to EUR 10,000 from the digital platforms a tax equal to 10% applies . Income over EUR 10,000 are added to the income from work or earned as an employee or self-employed worker, to which the corresponding tax rate is applied .
Several observations need to be made about this provision:
- it is based on a single annual income threshold , applicable to all the income received via online platforms, like the proposal of the Working Group, and in line with the logic used by the United Kingdom and Belgium. According to the Directorate General of the Treasury, the EUR 10,000 threshold has been proposed as being the most appropriate to differentiate an occasional activity from a regular activity of the professional type ;
- the EUR 10,000 threshold is certainly higher than that decided by the Working Group, but lower income is subject to a levy in discharge: in this aspect, the Italian proposal is closer to the solution adopted by Belgium than the British solution or the proposal of the Working Group, which consists of tax-free allowances;
- the creation of a new income category , which would be included in an ad hoc box of taxpayersincome tax returns (the equivalent of Declaration No. 2042 C in France, see above) and would be subject to a specific fixed rate of 10% instead of the progressive scale of the income tax, therefore again raises a problem of equality before taxation .
The observations made about the Belgian law therefore apply to the Italian bill and perhaps even more so, given the fact that the advantage applies to a base of EUR 10,000, which may constitute a non-negligible part of a self-employed workers income . Depending on the case, the proposed measure could therefore either harm physicalself-employed workers, or on the contrary create a strong deadweight effect, with the latter switchingpart of their proceeds to the platforms, in a more or less artificial way 116 ( * ) .
C. THE UNCERTAIN IMPLEMENTATION OF AUTOMATIC REPORTING
Article 12 also provides for a compulsory mechanism for the automatic reporting of income by the platforms :
The platform managers act, as regards the income generated by the digital platforms, as reporting third partiesin respect of users . To this end, platform managers domiciled or residing abroad must have a permanent establishment in Italy .
The platform operators shall communicate to the tax authorities the data relating to any transactions that have taken place via the digital platforms, even if users have received no activity income through these platforms .
Formally, automatic reporting would therefore be compulsory , with online platforms becoming reporting third partiesin the same way as companies are for their employees and as financial institutions for their customers. The system differs on this point from that decided by Belgium.
However, the effective scope of such an obligation is uncertain , since it is based on the obligation for the platforms to have a permanent establishment in Italy, which seems in principle contrary to the rules of the internal market relating to the freedom of establishment and the free provision of services. In the absence of this provision, the platforms established in another European country or even outside the European Union could decide not to implement automatic reporting or moreover the other provisions of the bill.
In this regard, the incentivising component of the proposed measure , i.e. the application of a reduced rate of 10%, seems more likely to encourage the implementation of automatic reporting.
* 116 For example, a trader could, in his physical shop, offer his customers to ability to pay via a platform, which would simply be a smartphone application or even a payment terminal. Such a case could where appropriate be subject to an adjustment provided it is detected, which the reporting of income by the platform alone cannot do.