When we ask if they issue a receipt for the purchase, they all run away. They don’t respond, and in some cases they block. This is the digital Wild West that takes place every day on social networkswhere what until a few years ago was a simple showcase of passions (mixed with protagonism), has today become a multi-billion dollar business centre, available 24 hours a day from your sofa.
TikTok, Instagram and Consumer-to-Consumer platforms (C2C), in which the consumer sells directly to another consumer (like Vinted) have transformed millions of users into shopkeepers, often unaware of the implications (starting with the tax ones) of their activities.
The endless bazaar between hobby and business
After the 15 minutes of fame prophesied by Andy Warhol, we now sink into an era in which virtual shops, videos and stories forge the largest bazaar in history where everything is sold: from handmade items such as embroidered t-shirts, to restored furniture, to crocheted scarves, to any poor quality object bought directly online from China or in the endless fast fashion shops that dot our country. One above all? The Macrolotto in Prato, which has become a swarm of Instagrammers. The markup is impressive: a t-shirt paid for 5 euros is sold ten times as much. And often totally in black.
This is the new and difficult to quantify parallel economy, which exploded with the pandemic and has now grown to the point of escaping the net of regulation. A gigantic market that thrives in a fundamental gray area: the increasingly blurred boundary between the occasional hobby and business activity.
When the hobby becomes escape
The majority of micro-sellers – be it the girl who creates handmade ceramics or the vintage enthusiast who clears out the attic – operate without a VAT number, convinced that selling on social media is a non-taxable private activity. In reality, Italian tax legislation (art. 55 of the Consolidated Law on Income Taxes) does not set a turnover limit (the myth of 5 thousand euros is a misunderstanding relating to self-employment), but is based on two much more nuanced criteria: habit And the organization. In short: selling your used coat is an occasional act, but creating an Instagram account with weekly “drops” of clothes, using sponsorships and managing a constant flow of orders constitutes a commercial activity in all respects. This is where the hobby becomes a business, and the escape goes from unconscious to structured.
Payments hidden in DMs
For years, this trade remained “invisible” thanks to a payments architecture that was as simple as it was effective. Transactions on social media often take place on a “black” channel, directly in private messages (Dm), with payments required via methods that are difficult to aggregate at scale, such as top-up Postepay or PayPal’s “Friends and Family” option (which avoids fees and tracking). Alongside this, there is the “grey” channel of platforms such as Vinted or Etsy, where the money flows into a digital wallet, giving the seller the illusion that those funds, until they are transferred to the current account, remain in an unmonitored limbo.
DAC7: the end of invisibility
But the era of the digital Wild West is (perhaps) coming to an end. The turning point seems to have come with the DAC7 directivewhich came into force in the EU in January 2023, which obliges the managers of all digital platforms (from Vinted to eBay, from Etsy to Airbnb) to automatically collect, verify and communicate to national tax agencies the data of sellers who exceed certain thresholds. The reporting to the Revenue Agency is inexorably triggered when the threshold is exceeded 30 transactions of sales in a year or upon achievement of 2 thousand euros in revenues. Thus, millions of Italian micro-sellers who thought they operated anonymously are now present in the tax database, complete with tax code, IBAN and total amount collected. If those incomes do not appear in the declarations, the checks will arrive (at least on paper) automatically.
The digital eye of the Financial Police
However, the Revenue Agency is not the only actor. There Financial police it has been moving for some time using Osint (Open source intelligence) algorithms and techniques. Specialized departments, such as the Special Technological Fraud Unit, monitor social media, profile obviously commercial accounts and cross-reference everything (exhibited lifestyle, frequency of sales, customer reviews) with tax databases. When a profile that handles thousands of euros a month turns out to have nothing, the investigation is an almost certain consequence.
Influencers and creators in the crosshairs
The first front to be hit was, predictably, the most exposed: the influencers and content creators. Here, evasion concerns both the sale of products and the failure to declare the millionaire compensation received from companies for sponsorships or from potential followers. What happens above is emblematic OnlyFans: Mad Joe (Madalina Ioana) was charged with an escape from 1.5 million euros. Then the operation of the Financial Police of Bologna was sensational, renamed “Unknown to the tax authorities”, which in March 2024, brought “social” names such as Gianluca Vacchi And Luis SalGiulia Ottorini or Elena Bertoli, and made it possible to recover overall in addition to taxation 11 million euros.
A rampant phenomenon
But this is a decidedly widespread situation. An example? Last month in Cosenza a young creator with over a million followers was singled out for failing to declare further 200 thousand euros in two years, and shortly before in Cattolica another had “forgotten” to declare approximately 300 thousand euros. Then there are those who use platforms for pure electronic commerce. Last year in Verona the Gdf unmasked a seller who, pretending to be a private individual, had created a parallel business between shoes and clothing with revenues exceeding 100 thousand euros. In Prato, however, a citizen of Chinese origin used Vinted as a real online store, managing to sell approximately two thousand articles for a (black) revenue of 40 thousand euros.
Phantom e-commerce and massive fraud
But that’s not all. In Naples they were almost kidnapped 6 million euros to a company, known on TikTok as “Napolitano Store” by Angelo Napolitano, specialized in the sale of electronic products: it evaded VAT and used false invoices. While in Biella the “eBay crafty people” ended up in the crosshairs, 15 sellers who acted as real commercial businesses and had failed to declare revenues for 1.5 million euros.
This is obviously not just an Italian problem. The US is experiencing similar regulatory chaos with the Internal Revenue Service (IRS) attempting to mandate Form 1099-K for anyone receiving payments over $600 on platforms like Venmo or PayPal, while the UK has adopted rules mirroring DAC7 and France has implemented similar requirements.
New techniques to escape controls
It is certainly interesting to analyze how the strategies of illegal sellers are constantly updated. The first rule is to make the evidence of the transaction disappear and so, after an initial contact on the platform, we prefer to continue the conversation on WhatsApp or Telegram (more difficult to control) by requesting payments on account cards or digital banking services. The collected money is thus not transferred to the traditional current account, but credited to “satellite” instruments such as Revolut, N26 or other prepaid ones where the profit is spent directly, effectively breaking the chain that the Revenue Agency could follow.
For those who do not want to give up the visibility of the platform, the fragmentation of accounts takes over (with the use of frontmen or relatives, often unaware).
Dropshipping in disguise
Among all the strategies, the ghost company par excellence deserves mention: the so-called disguised dropshipping. Many sellers, especially on Instagram and Facebook, don’t even own the merchandise they display. They post eye-catching photos of gadgets or clothes, and once they receive payment, they simply order the item from a very low-cost supplier, like Temu or AliExpress, and have it shipped directly to the customer. The seller has no warehouse, does not manage shipments and collects the price difference as a completely invisible net profit. At least for now.
