Italian Prosecutors Block €400m in Tax Credits in Scottish Company Investigation

Strategic Insights -

Italian prosecutors have uncovered a widespread tax-credit scam involving two Scottish-registered companies, Global Services 2 Ltd and Assistenza Sviluppo e Formazione Ltd, which allegedly sold non-existent software to companies across Italy. The investigation, led by the public prosecutor's office of Taranto in Puglia, has resulted in the freezing of €400m in tax credits, affecting over 70 individuals, including entrepreneurs, accountants, and a husband and wife team who own an amateur football side.

Key Takeaways:

  • Global Services 2 Ltd, a Glasgow-registered company, allegedly sold non-existent software to companies in Italy, enabling them to claim tax credits of up to 50% on investments made in special economic zones (ZES) in the southern regions of Italy.
  • The investigation, led by deputy prosecutor Enrico Bruschi, has identified over 70 suspects, including entrepreneurs, accountants, and individuals involved in organized crime.
  • One of the suspects, Michele Cicala, has a history of convictions for organized crime and tax evasion and is currently on trial for hydrocarbon-related crimes.
  • Assistenza Sviluppo e Formazione Ltd, a now-dissolved Glasgow-registered company, allegedly provided fake technology to the UG Manduria amateur football team in exchange for tax credits.
  • The investigation has also identified a link between the Scottish-registered company and a Italian law firm, InnovaItalia, which allegedly served as an intermediary in the scheme.
  • The seizure orders, signed by investigating judge Francesco Maccagnano, have frozen €400m in tax credits and are expected to have a significant impact on the companies and individuals involved.

Statistics:

  • €400m: The amount in tax credits frozen as part of the investigation
  • 70+: The number of individuals under investigation
  • Global Services 2 Ltd: The number of assets: £100 ( last set of accounts, made up for a dormant company)
  • Assistenza Sviluppo e Formazione Ltd: The number of assets (unspecified)
  • 50%: The tax credit claimed by companies on investments made in special economic zones in Italy
  • 2017: The year in which the law encouraging advertising investment in local media was passed
  • May 29, 2024: The date of incorporation of InnovaItalia

Sources:

  • Italy Times
  • The Herald
  • Companies House