Italy's Historical Shift: Recognizing Prostitution in Business Classification

Italy officially includes prostitution in its business classification for data collection and tax purposes. Previously operating in a legal limbo, the updated ATECO system highlights sex work as part of personal services, aligning with EU accounting rules, but only considers legal activities.

In a historic move, Italy has for the first time acknowledged prostitution within its official business classification, a decision by the national statistics institute for data and tax purposes. The new classification encompasses escort services, events, and premises management, marking a significant step in formalizing the industry.

Italian sex workers have historically operated in a legal grey area, offering services without specific regulations, while organizing sex workers into brothels remains banned. With the updated ATECO system taking effect from April, sex workers can now secure a VAT number to regularize their status, better aligning Italy with European regulatory standards where countries like the Netherlands and Germany regulate sex work.

The Italian statistics agency, ISTAT, has categorized sex workers under the personal services section, alongside tattoo studios and party organizers. This inclusion enhances visibility for a traditionally obscure industry, aligning with European Union accounting rules, albeit only legal activities are recognized in Italy's classification. The shift is part of a broader effort to address a shadow economy valued at over 200 billion euros in 2022, around 10% of Italy's GDP.

(With inputs from agencies.)