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How I’m Enduring as a Solopreneur in Italy, One of The Worst Countries for Solopreneurs

Turning tax hurdles into opportunities in the Bel Paese

Planes making the colors of an Italian flag
Photo by Anna Shvets on Pexel

Selling digital products in Italy costs €4000 a year. I’m not joking.

I’m a freelance writer and English teacher working for universities and other private clients. By the Italian tax law, I fall under the category of consultants.

If I earn less than 85,000€ a year, the amount of tax I pay depends on how much I make. If I make X, I pay about 33% of X in tax. It’s not that bad.

Until I decide to sell a product.

If you sell products — including digital ones — you’re not considered a consultant anymore. You become a trader.

And that’s when things start to stink.

Tax Laws That Cut My Wings

Last year I wanted to create workbooks and study guides for my students and sell them online as PDFs.

“Technically, you can’t,” my accountant said.

“What? Why not?”

“Because you would have to enter your business into the Italian Business Register, submit the commencement activities declaration to the Italian Revenue Service and register for the National Institute of Social Security as a trader. Oh, and you’d have to pay about 4,000€ euros every year (source in Italian), regardless of how much you sell.”

“Uh?”

“Sorry, but that’s how it works.”

“What d’you…I mean..are you%!°#€=??!!!f**k@!!??????????”

I didn’t want to believe my accountant. So I talked to another one, and then another one, and another one. They all said the same thing. I did some research online. Same story.

I cannot experiment with creating and selling digital products unless I’m sure I’m going to make over 4000€. Making less than that would mean operating at a loss.

If you’re just starting out and want to test the ground with a new product, these idiotic laws basically cut your wings.

So I had to say goodbye to all my plans to sell:

  • Paid newsletters
  • Video courses
  • Workbooks
  • Online communities
  • Premium podcast episodes
  • Recorded webinars
  • E-books
  • Templates
  • PDFs

…and any other digital product I could think of.

“Can I open a YouTube channel and monetize through that?”

Hahaha! No, sorry, you’d still be considered a trader.(source in Italian)

“How about self-publishing a book on Amazon? That would give me some visibility and could be a great marketing tool for me!”

“Hahah!”

Self-Publishing Books in the Land of Dante

Photo by Tbel Abuseridze on Unsplash
 

Given I come from the land of Dante, Boccaccio and Primo Levi, I assumed publishing a book was no big deal.

So I wrote one on how to master a second language. The project took me one year and the plan was to sell it on Amazon through its Kindle Direct Publishing platform.

But because I’m an asshole, only three days before my book launch I thought, Wait a second. Am I allowed to self-publish and sell a book in this country if I’m a freelancer?

For two weeks I watched YouTube videos, read relevant blogs, listened to live interviews with tax lawyers and sent multiple emails to my accountant.

The verdict: As a freelancer, you can’t even self-publish a book unless you do it through a publishing house (which, good news, I then found).

Doing it through Amazon would still throw you into the “trader” bucket.

Should I Cry About This?

I could rant forever about these idiotic policies.

I could whine about Italian bureaucracy, which is among the heaviest burdens startups have to face according to the Startup Ecosystem Report 2023.

I can criticize Italian policymakers for burdening small business owners with up to 200 different types of deadlines and requirements related to privacy, security, reporting, and tax obligations.

I can crucify Italy for being the third-worst country in 2021 for working as a freelancer after Japan and China.

But where would complaining take me?

If you’ve read The Obstacle Is The Way by Ryan Holiday, you may know that challenges, setbacks, impediments and misfortunes are actually opportunities for growth.

I see no opportunity though.

Until I ask myself: What’s good about all this?

What’s Good About This?

Not being allowed to make passive income through digital products made me realise I have other opportunities.

I can:

  • Explore other forms of making money. I’ve recently discovered I can apply to be a ghostwriter for a publishing house and have already had a first interview that went well. I’m excited.
  • Connect with my audience on a more personal level. Instead of creating stuff online for people I’ll never meet, I’ve been going around town advertising one-to-one English classes. Soon I’ll be giving language lessons in my living room while having real — not virtual — coffee with my clients.
  • Spend more time improving my writing skills. Since I don’t need to think about what form of digital product I could create next, I have less to advertise, launch, and promote. All my “creating” time goes into writing — my favourite activity.

So I realised I have two options: I could either blame the world for not being kind to me, or I could get down to business and turn whatever hindrance into my next business opportunity.

Final Thought

On his blog, Derek Sivers — an incredibly successful entrepreneur — tells a brilliant story that starts like this:

I was at a musicians’ gathering in Memphis. I met a lot of people complaining that their various forms of online distribution weren’t earning them as much as they’d hoped.

Then I met a musician who sold 8000 copies of his album himself. No distributor. No website. Just by himself.

I asked him how he did it. He said, “I just slowly drove around the city every night, with the windows down, playing my music loud. When I saw someone digging it, I’d go talk with them. I’d sell almost everyone a copy — about 20 or 30 a night. Been doing this about a year. Sold 8000 so far.”

How can you turn whatever challenge or obstacle you’re facing right now into your next business opportunity?

How can you, too, be resourceful?

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