Italian government starts tax raids on yachts - Trade Only Today

Italian government starts tax raids on yachts

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With a public debt of nearly 2 trillion euros, Italy is cracking down on tax evaders and luxury yacht owners are prime targets.

Tax police are launching dockside raids to see how individual tax files line up with owning and maintaining an expensive boat, according to a National Public Radio report.

In response, many boat owners are simply weighing anchor and setting course for more tax-friendly Mediterranean marinas.

On-the-spot tax inspections began last winter in Cortina d'Ampezzo, the trendy ski resort where many owners of Ferraris, Maseratis and Lamborghinis declared incomes of less than $30,000 a year.

This summer, tax police arrive dockside unannounced, board boats and check owners' details against their tax files. The raids have sent shock waves through the yachting community.

Since the tax crackdown was announced in March, about 30,000 boats have fled Italy, seeking safer havens, such as Slovenia, Croatia and Montenegro to the east, France and Spain to the west, and Tunisia and Malta to the south.

The Italian association of marinas says the yacht exodus has cost the Italian economy $350 million this year in lost revenue from marina fees and services, and fuel sales.

Tax authorities are unrepentant, saying it's important to strike fear into the hearts of tax dodgers. Italy has a long history of tax evasion, and it is estimated to cost the government $160 billion a year in lost revenue.

At a waterfront sail-repair shop, Paola Valenti told NPR that business was down. Despite her diminished income, she has little sympathy for tax-dodging yacht owners.

"If you own a boat," she says, "you have to have a certain declared income. You can't earn less than the sailor who works for you."

Click here for the full report.

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