Trial Of Pavarotti On Tax Charges Begins In Modena

by Ulrika Lomas, Tax-News.com, Brussels

03 May 2001

Just three days after 66-year-old tenor Luciano Pavarotti sang at a gala concert in his home town of Modena to celebrate forty years of success on the operatic stage, his trial on charges of tax evasion began in the same city. 40 years ago, he made his professional debut in La Boheme; but yesterday he was represented in the courtroom only by lawyers and by his business partner and mistress Nicoletta Mantovani.

Pavarotti is accused of evading more than 40bn lira ($20m) of taxes between 1989 and 1995. He has already reached a settlement with the Italian Finance Ministry over the issue: last July, Pavarotti agreed to pay $5m immediately and another $7m in instalments over a two-year period. Afterwards, he was photographed shaking hands with the Italian Finance Minister, Ottaviano del Turco, who held him up as an example to Italian tax-dodgers.

In other countries, settling with the tax authorities usually implies that court action will be avoided, but the independent-minded magistrates in Modena want their pound of flesh, and are pursuing the tenor regardless of the settlement. The Modena authorities say that Pavarotti earns about $35m a year, and that his residence is clearly in Modena. Said Eleonora De Marco, the Modena public prosecutor: "the centre of his interests is not Monte Carlo but Modena, given that he has houses, family, and investments in six banks in the city, and in 11 companies which answer to him." The singer's Italian assets are said to include a residence and show-jumping complex near Modena, a villa where his former wife Adua lives with their daughters, and a farmhouse on the Adriatic Coast with six bedrooms, parkland and a pool.

The rules in Italy are that a person is liable for tax on his world-wide income if they are habitually resident in Italy, if the centre of their vital interests is there, or if they are registered with the Office of Records of the Resident Population for the greater part of the tax year. It's the 'vital interests' wording which is being applied in Pavarotti's case.

Pavarotti argues that he is a "citizen of the world" and pays taxes where he performs, mostly in the United States, as well as in Monte Carlo, where he is resident. Pavarotti says that "I pay my taxes where I sing" and that he is a genuine resident of Monte Carlo. But at a preliminary hearing earlier this year, the prosecutor produced a recording of an Italian television programme in which the tenor seemed to be having difficulty in indicating the whereabouts of his Monte Carlo property on a photograph.

Yesterday's hearing was adjourned after just half an hour until September, when Pavarotti will explain to the court why he feels that he should not be taxed in Italy on his worldwide income. The prosecution is expected to call some 20 witnesses, including opera impresarios and managers. They will be asked to explain under oath the details of their financial deals with Pavarotti, who has sold more records than anyone else in history.

Recommended