Flavio in trouble with the tax man

[WhiteBlue]

Joe Saward's blog is interesting again today

Flavio in difficulties again
May 21, 2010 by joesaward
Flavio Briatore’s expensive yacht has been seized by Italian police as part of the investigation into alleged fraud. Force Blue was boarded by the authorities off the coast of La Spezia near Genoa on the authority of Genoa prosecutor Walter Cotugno, who is looking into the legal status of the vessel, as being a yacht available for charter. The yacht is available for charter at $360,000 a week and as a result is registered in the Cayman Islands, outside the European Union.. This means that Briatore gets a tax break. Cotugno believes that Briatore and his wife actually live on the boat. Force Blue was in Monaco last weekend for the Grand Prix.

Flav is working hard to uphold his impeccable reputation. [-X

[autogyro]

I wonder if the Italian police would let us hire the boat to help rebuild the Great Yarmouth fishing fleet.
Flav can stay living on board with his young wife, so long as they help pull in the nets three times a day and do a bit of fish sorting.
The fishy smell will be no hardship, he has always had that.

[autogyro]

Flavio realy should learn to stay away.
If he does not, he stands to lose a great deal more than his penis extension.

[flynfrog]

So what exactly is the problem with the Boat its not even registered in an EU country? Can you not charter a boat to your self? Its common practice to register in the caymans or the Bahamas to avoid taxes on boats.

[dumrick]

So what exactly is the problem with the Boat its not even registered in an EU country? Can you not charter a boat to your self? Its common practice to register in the caymans or the Bahamas to avoid taxes on boats.

If Flavio owns the boat and fills his pockets with those $360,000 per week when he rents it, and doesn't declare that income, that's tax evasion! Which could the problem be?

[flynfrog]

So what exactly is the problem with the Boat its not even registered in an EU country? Can you not charter a boat to your self? Its common practice to register in the caymans or the Bahamas to avoid taxes on boats.

If Flavio owns the boat and fills his pockets with those $360,000 per week when he rents it, and doesn't declare that income, that's tax evasion! Which could the problem be?

If he was smart he would set up a company based out of the Caymans to run the boat.

[WhiteBlue]

So what exactly is the problem with the Boat its not even registered in an EU country? Can you not charter a boat to your self? Its common practice to register in the caymans or the Bahamas to avoid taxes on boats.

The question obviously is whether this is a business or a private pleasure toy. If it is fully chartered to third party the money invested in the business would have been free or privileged of taxation under the Italian tax law.

When Flav used it last year in Monaco I bet he chartered it to Renault and used it for his business. This time he wasn't on business in Monaco and obviously did not charter it to someone else. So I guess the tax man wants to make sure a change of utilization is considered for the tax break status of the boat.

A German news service reported that last year the majority of time the charter was to himself as a private person. This isn't allowed under Italian tax law.

[dumrick]

If he was smart he would set up a company based out of the Caymans to run the boat.

The fact of something being hard to prove doesn't make it legal. If he did that, even if the company was exempt fromn taxes, his personal income form the company would be taxable.

OT, I would love to withdraw the UE passport to all those thiefs that use the common structures we all pay for, but refuse to contribute to them and deport them to the country their fortune rests on. The Cayman islands would become a luxury version of Rio de Janeiro's favelas

[WhiteBlue]

If he was smart he would set up a company based out of the Caymans to run the boat.

The fact of something being hard to prove doesn't make it legal.

Should we call it cheating?

[flynfrog]

So what exactly is the problem with the Boat its not even registered in an EU country? Can you not charter a boat to your self? Its common practice to register in the caymans or the Bahamas to avoid taxes on boats.

The question obviously is whether this is a business or a private pleasure toy. If it is fully chartered the money invested in the business would have been free or privileged of taxation under the Italian tax law. When Flav used it last year in Monaco I bet he chartered it to Renault and used it for his business. This time he wasn't on business in Monaco and obviously did not charter it. So I guess the tax man wants to make sure a change of utilization is considered for the tax break status of the boat.

Since I don't have all of the facts or a great understanding of EU tax law this is all conjecture. Why couldn't he just charter it to himself even if it was for pleasure? If a company in the Caymans owns the boat and you pay them a dollar excuse me a euro to charter it for a month I don't see what say the EU has in the matter.

[flynfrog]

If he was smart he would set up a company based out of the Caymans to run the boat.

The fact of something being hard to prove doesn't make it legal.

Should we call it cheating?

It the same way that F1 drivers build houses in Switzerland to avoid the horrendous taxes imposed on them.

[WhiteBlue]

The fact of something being hard to prove doesn't make it legal.

Should we call it cheating?

It the same way that F1 drivers build houses in Switzerland to avoid the horrendous taxes imposed on them.

You are in error there unfortunately. It is similar but a vital difference in most European countries tax law is again the utilization. If Schumacher for instance spends more than 180 day per year on German territory he will be taken in custody on day 181 and his Swiss taxation will be classed as tax evasion in Germany.

Exactly the same happened to tennis player Boris Becker who was caught cheating by spending too much time bonking various wifes and girl friends in beautifull Munich.

[flynfrog]

The fact of something being hard to prove doesn't make it legal.

Should we call it cheating?

It the same way that F1 drivers build houses in Switzerland to avoid the horrendous taxes imposed on them.[/quote]

You are in error there unfortunately. It is similar but a vital difference in most European countries tax law is again the utilization. If Schumacher for instance spends more than 180 day per year on German territory he will be taken in custody on day 181 and his Swiss taxation will be classed as tax evasion in Germany.

Exactly the same happened to tennis player Boris Becker who was caught cheating by spending too much time bonking various wifes and girl friends in beautifull Munich. [/quote]fair enough. I still dont understand how they can tax a boat owned in a foreign country. If I were to park my boat in the harbor for a gp would they try to tax me too. Or is it because Flav owns the company that owns the boat? Maybe its to early in the morning for me to wrap my head around this

[WhiteBlue]

Should we call it cheating?

It the same way that F1 drivers build houses in Switzerland to avoid the horrendous taxes imposed on them.

You are in error there unfortunately. It is similar but a vital difference in most European countries tax law is again the utilization. If Schumacher for instance spends more than 180 day per year on German territory he will be taken in custody on day 181 and his Swiss taxation will be classed as tax evasion in Germany.

Exactly the same happened to tennis player Boris Becker who was caught cheating by spending too much time bonking various wifes and girl friends in beautifull Munich.

Fair enough. I still dont understand how they can tax a boat owned in a foreign country. If I were to park my boat in the harbor for a gp would they try to tax me too. Or is it because Flav owns the company that owns the boat? Maybe its to early in the morning for me to wrap my head around this

The main point is Flavio being an Italian resident is supposed to pay some 50% income tax on his earnings wherever they happen in the world to the Italian tax man. He is allowed to deduct money he invests from his income and reduce his tax burden if the investment is actually a legitimate business and not a cheat fiction like the Force Blue.

[dumrick]

I still dont understand how they can tax a boat owned in a foreign country.

If the boat is registered in a foreign country, they can't tax the boat, surely. But if an european citizen has personal revenues from renting that boat, that income is taxed, the same way the IRS taxes any individual's earnings.

I you owned a 100% share of a company registered in India, the company's profits would be subjected to Indian taxes, but your individual revenues from that company would be taxed in the country you live in.