The ethical tax is an additional tax introduced in Italy with the financial law (Law 266/2005) of 2006 and applied to income deriving from activities that the legislator has defined as “sensitive”, starting from the production and dissemination of pornographic content. The rate is 25% and is added to ordinary income taxes. Those who pay it are professionals, entrepreneurs and digital creators, including those who operate on a flat rate basis. It is therefore a levy that directly affects the declared income and which arises from the idea of using taxes not only to collect resources, but also to economically discourage some activities.
A logic that has recently returned to the spotlight, given that the Revenue Agency has confirmed the application of this tax also to digital workers who produce adult content. At the end of January, the Italian Radicals presented a popular initiative bill to the Senate to abolish the rule, arguing that the tax system introduces a moral criterion into the tax system and raising doubts about its compatibility with the principles of secularism of the State and ability to pay.
Promoters contest the tax on several fronts: according to them it ends up disproportionately affecting those who work on digital platforms, such as OnlyFans, and is based on an ambiguous regulatory definition of what is taxable. Among the public faces who have taken a stand there is also Valentina Nappi, an Italian pornographic actress and creator, who has openly criticized the very logic of the law and the way in which it is applied.
A tax that has existed since 2006 with the Berlusconi government (never really digested)
The ethical tax was born in the mid-2000s, in a political and cultural context very different from the current one. Inserted in the finance law for 2006 by the second Berlusconi government, with Giulio Tremonti Minister of Economy, the 25% surcharge on income linked to pornography was conceived as a disincentive tool: to economically target sectors considered socially problematic without going so far as to ban them.
At the time the target was above all the traditional supply chain – production, distribution and sales – in a market that was still largely analogue. Since then, however, the rule has remained substantially unchanged while the job market has changed profoundly. The spread of digital platforms, the birth of the creator economy and the increase in online self-employment have significantly expanded the number of subjects potentially involved. It is in this gap between a law conceived twenty years ago and a completely different economy that much of the criticism is concentrated.
The tax on pornography amounts to 25% of income
To understand the concrete impact of the ethical tax, a numerical comparison is sufficient, with the same revenues and tax regime. Let’s imagine two workers on a flat rate scheme, both with 20,000 euros in annual revenue: on the one hand a creator who publishes pornographic content, on the other an actor not subject to the surcharge. For both we assume, for example purposes, a profitability coefficient of 67% and a substitute tax of 15%, consistent with the ATECO codes used for artistic and acting activities.
In this scenario the taxable income is equal to 13,400 euros (20,000 multiplied by 67%). On this basis both pay the substitute tax: 2,010 euros. However, the creator subject to the ethical tax must also pay the additional 25% on the same taxable amount, equal to 3,350 euros. The result is an annual total of 2,010 euros for the actor and 5,360 euros for the creator, with a difference of 3,350 euros for the same revenue.
A substantial difference that penalizes a sector and very often forces workers to move to Eastern countries where taxation and production cost significantly less.
