Italian tax authority after Ryanair pilots

[A and C]

Dannyalliga

It's three weeks now since I asked you exactly what the RYR guys on Italy are being charged with, I can only assume that you are enjoying your winter holiday as you are usually very prompt to reply on the subject of RYR.

[Callsign Kilo]

I can understand the Ryanair stance of not getting involved in the tax matters of what it considers to be contractors as this would be an admission that the people were employed and not contractors.........hardly what Ryanair wants.

It would take all of 5 seconds to prove. Rumour now circulating is that the Revenue in Ireland will now be investigating the way a huge percentage of Ryanair contract pilots are set up, as Irish Limiteds.

[dannyalliga]

A and C (alcohol and chips?),

I thought that given the latest news coming from several countries you didn't need my explanations anymore but since you have been waiting 3 weeks I will copy/paste what I told you exactly 3 weeks ago

A and C,

Here comes some more babysitting:
1- the Italian social security office is after Ryanair for not having paid social contributions to its EMPLOYEES in Italy but to Ireland instead and this is a court case
2- the Italian tax man is giving 60 days to Ryanair EMPLOYEES to pay taxes to Italy and not to Ireland (starting from 2006) based on the assumption that ryanair has a permanent establishment in Italy and this is not a court case unless the EMPLOYEES appeal the decision of the tax man and take the issue to court themselves.

And the contractors scandal hasn't even surfaced yet

P.S.: we don't have any holidays in Ryanair , only unpaid leave.

[davidaz68]

This issue is not only involving RYR crews but all crews working for foreing airlines but permanently based in italy.
The agreements among countries to avoid double taxation says clearly that for flying crews taxes are to be paid where the company is based. Now the company is based in ireland but many aircraft and crews are based in Italy.
More, Italian tax authority wants to know your income (if you are resident in italy) even if no taxation is due. If you do not declare it at all, they assume it is 100% taxable. Then you have to demonstrate they are wrong but there are a lot of holes in the laws leading to different interpretations.
The main reason for all this is, if you do not declare your income at all, you could have a lot of bonus. From free medicines, to free books an meals for your kids at school and so on.

[wiggy]

The agreements among countries to avoid double taxation says clearly that for flying crews taxes are to be paid where the company is based.

It doesn't always work that way -


AFAIK under the current rules I think the idea is all of your social charges are supposed be paid in the country in which your airlines is based. OTOH under some agreements/treaties you pay some tax in the country where your company is based and the rest of your tax in country of your "center of interest" - the whereabouts of your main residence, place of residence of wife and kids....etc.

[davidaz68]

I know, with some countries there is no agreements at all and normally you pay where you work and the rest (the difference) in your home country. But among european countries, and not only, (in the italy-irland agreement is on point 14.3) is specified that for jobs aboard ships and aircraft, taxation is due where the company is based.
the issue here is the definition of "base".

[A and C]

Dannyalliga

Thank you for that.

So what you are saying is that the Italian courts are trying to establish that a company based in one EU state and paying the ALL the taxes of that employee in that state the company is based in is also responsible to pay he same taxes in the EU state the employee is resident in ?

I could understand the Italian tax man going after the contractors but it seems to me that he is picking on the easy and wrong target if the employees who have paid all of their taxes in another EU state as this runs counter to the free movement of Labour within the EU.

[wiggy]

But among european countries, and not only, (in the italy-irland agreement is on point 14.3) is specified that for jobs aboard ships and aircraft, taxation is due where the company is based.

Should that read ( or is the meaning ) "some taxation is due"??

Example: A crew member lives in, say, France, with his/her family, but works for a UK based airline such as Virgin flying out of LHR/LGW.

In that situation they pay all their work related social charges to the UK - because Virgin are UK based. They then pay some of their income Tax in the UK, the rest (usually the majority) is paid in France.



So yes, I agree that the issue here in this particular debate is more likely to be :

the definition of "base".

[A and C]

Wiggy

That is more or less the way I would see things in that the Italian tax authority's are due any deference between the Irish and Italian tax for an Italian resident.

If that is the case they are trying to make then it is a simple case of the employees trying to avoid their Italian tax......... However I think there is a little more to it than that. Perhaps Dannyalliga might like to expand on this ?

[A and C]

Davidaz68

If it is the case that the Italian govenment is using this issue as a way to offer financial protection to Italian airlines then it is in direct contravention of the EU policy of the free movement of trade & labour within the EU and so in its self is an illegal act.

It would be far better for the Italian govenment to seek an agreement with other interested governments to look at the self employed status of the vast majority of RYR employees as this would be the long term solution to get the level playing field that will allow the Italian airlines to compete.

[davidaz68]

The initial purpose of this war was not against employees but against RYR and similar companies which operates domestic flights within a country but with the benefits of a much less restrictive irish taxation.
France has been leading the way on this with the purpose of defending national airlines.
Now, Any Italian Airlines employing personnel has to pay the salary, taxes, and pension contribution for them. let's say that if you have a gross amount on the paycheck of 10000 euro, the net amount is less than half that number. This is not true for RYR & c. so there could not be a fare competition.
Many european authorities now say to RYR, Ok, you can try to sell your ticket to 1 cent but you must do it at the same conditions of the others.
Of course the taxman is always searching for new incomes and so pilots and flight attendants are the victims of a very complex, ever changing and not very clear matter: taxes.

[PenTito]

Or, like Myair (Soddu) not pay any to the state. Beat this RYR if you can.....