Diplomats, antique dealers in Italian tax-law tangles

The early 19th-century French ladies' writing desk was priced at 1,540,000 lira ($1,800). But its inlaid rosewood top was superbly crafted and had been tenderly cared for during the eight or nine generations of its longevity. It was love at first sight for a certain foreign diplomat who, in accordance with diplomatic nicety, shall remain anonymous.

"How about 1,350,000 lira?" the diplomat offered. The antique dealer replied that the price was fixed. But after some discreet haggling a price of 1,465,000 lira was agreed on.

Then the real fun began. Diplomats, the purchaser explained, are exempt from the tax on sales of antiques that a dealer ordinarily pays. So the tax should be deducted from the bargained price.

"No!" the dealer exclaimed. That wasn't part of the agreement at all! The diplomat remonstrated, pointing out that it shouldn't make any difference in the price the dealer himself would get.

Eventually the dealer yielded but said the estimate of 30 percent tax was too high; the tax was more like 10 percent. So the deal was reconsummated with the proviso that both would go find out from friends what the exact antiques tax was , and this amount would be deducted from the 1,465,000 lira.

The diplomat went first to an Italian colleague who has the reputation of knowing everything there is to know about Italy.

The colleague didn't know the answer.

More surprisingly, a friend in the tax office couldn't seem to ferret out the information. So the colleague with the reputation to uphold determined to track down the fact elsewhere. The trail led to the the drafter of the tax legislation. The tax had been 32 percent, he reported, but it had been lowered to 18 percent after a group of parliamentarians' wives complained to their husbands.

Back went the diplomat to the dealer. But the dealer had meanwhile discovered that the tax was 14 percent. Impasse. So back the diplomat went to his sources.

It turned out both sides were right. The tax on antiques over a century old was 18 percent. But the tax on antiques less than a century old was 14 percent. And since the law was promulgated, not one sale had been recorded of an antique more than 100 years old.

The diplomat returned to the dealer offering 14 percent. The dealer said "OK , I'll give you 2 percent more, make it 16 percent."

When the diplomat dropped into the shop weeks later, the dealer said: "Any deal we make on anything already discounts the tax."

Moral: That's why a recent Italian law, passed after analysis revealed declaredrestaurant receipts to be only some 20 to 25 percent of likely public consumption, compels all diners to take numbered bills with them.

Further moral: Ah, bellissima Italia!