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Italian Yacht Owners Flee Tax Inspectors

By Ulrika Lomas,, Brussels

27 July 2012

Italian High Net Worth Individuals are sailing their yachts away from Italy amid a large-scale investigation into the tax affairs of the wealthy.

Italy, the country where tax evasion is perceived to be a national sport, has decided to crack down on tax evasion to restore its public finances. Six months after a similar campaign on luxury ski resorts, Italian tax officials are investigating high-end yachts, in particular those over 20-metres in length, with a view to finding owners who have possibly declared low or zero income on their annual tax returns.

It is said that almost around one quarter of the almost 1,000 yachts moored in one Italian marina were owned by taxpayers who had declared no income or extraordinarily low income.

Prime Minister Mario Monti's government has also implemented a new tax on yachts as part of the recent austerity package of up to EUR700 per day, adding to the massive outflow of Italian yachts towards foreign shores in the Mediterranean sea. As a response to this, it is said that an estimated 30,000 yachts have already left the country.

HNWIs are not the only ones concerned with this major tax collection campaign. The yacht industry and marinas are also hurt as a side effect of this crackdown on tax evasion. Due to this flight of yachts, marinas have faced an estimated EUR200m (USD245m) loss in revenue, and plans for the construction of tens of thousands of new yacht berths have been put on hold throughout Italy.

A similar crackdown on luxury car owners has had a similar effect during the first quarter of 2012, with sales of Ferrari and Maserati dropping by a reputed 50-70% during the period.

TAGS: compliance | tax | marine | tax compliance | tax avoidance | law | offshore | Italy

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