Pavarotti Feels No Guilt Over Unpaid Taxes

by Ulrika Lomas, Tax-News.com, Brussels

19 September 2001

Italian opera singer, Luciano Pavarotti, told the court in Modena this week that he 'does not feel guilty' over the alleged £14 million in unpaid Italian taxes which the authorities say he dodged between 1989 and 1995. 'If the law says to the contrary, I want you all to know that I was acting in total good faith.'

Pavarotti's troubles began in 1991, when he declared Italian income of only £1,000, despite the fact that royalties worth more than £3 million were deposited in his numerous Italian bank accounts. This led the Italian tax department to question his assertion that he was resident for tax purposes in the low tax haven of Monte Carlo, and an investigation was begun which culminated in a settlement with the central tax authorities. However, this hasn't deterred the local tax authorities in Modena, who believe that his equestion centre, family connections, and Italian bank accounts point to the fact that he is resident there, and should be taxed as such.

Pavarotti has always disputed this, claiming that he pays taxes where he sings: 'I have always paid taxes in the country where I perform, and 80% of that time is spent abroad,' he explained recently. 'I only come to sing in Italy for charity. The rest of the time is spent on holiday and with my family.' He added: 'I earn money abroad and bring it into Italy. I don't think it's right to think ill of me for that reason.'

The investigations into Pavarotti's tax affairs and those of his fiancée, Nicoletta Mantovani, have been extensive and drawn out, and earlier this year, the maestro's lawyer, Massimo Leone, vowed to put an end to the ongoing investigations by proving that the singer's core business is global rather than Italian, and that 99% of his professional activity takes place outside his country of birth.

'The maestro records for an English company which in turn is owned by an American company,' he said at the time. 'He holds 80% of his concerts in America. We cannot understand why he should be considered an Italian taxpayer.'

The trial, which was expected to last for four days, commenced on Monday. The next hearing is scheduled for Tuesday of next week, but the singer is not required to attend.

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