Briatore back in the dock again
Flavio Briatore is back in court again, facing tax evasion charges relating to a sum of €3.6 million that prosecutors claim was the result of 'false registration'. This case highlights the grey area that increasingly exists for commercial yachts that are used by their UBOs.…
Flavio Briatore has returned to court in Genoa, facing charges of tax evasion. The charges relate to Briatore’s use of his superyacht Force Blue, despite registering the superyacht as a commercial vessel.
Briatore’s yacht was originally seized in 2010, and prosecutors allege that he underwent ‘false registration’ in order to avoid incurring tax on the purchase and subsequent operational costs totalling €3.6 million.
Despite Briatore’s assertion that, if he had been asked by fiscal authorities to pay tax he would have willingly done so, the prosecution team of Patrizia Petruzziollo and Walter Cotugno have proposed a sentence of up to four years in prison.
Briatore’s case highlights the grey area that exists for superyachts being used for both charter and private use in some jurisdictions. In Italy for example, a charter vessel can only be operated with a valid charter contract. And there are growing demands among fiscal advisors, for clarity as to whether the yacht will be private or commercial from the germination of the project.
“With the intricacies of owning and operating a yacht, it would be advisable that, from day one, every owner should be clear about what he or she wants to do with the vessel, especially if it is a new build. Is it purely for pleasure or is it for charter? The changing tax and regulatory requirements mean the mix and match approach is becoming increasingly complex. The impact of this is already evident. Some of our clients tell us they purchased a yacht primarily to enjoy it, but also do the odd charter. Times are changing and this type of usage is becoming a less viable option.
“At the new build stage, the choice of pure pleasure or charter should determine the nature of the build. Charter yachts have to comply with flag state commercial regulations but also be suitable and attractive for charter use. On the other hand, if an owner is having a pure pleasure yacht built, he or she can have it designed according to personal taste.”
Briatore’s yacht was originally seized in 2010, and prosecutors allege that he underwent ‘false registration’ in order to avoid incurring tax on the purchase and subsequent operational costs totalling €3.6 million.
Despite Briatore’s assertion that, if he had been asked by fiscal authorities to pay tax he would have willingly done so, the prosecution team of Patrizia Petruzziollo and Walter Cotugno have proposed a sentence of up to four years in prison.
Briatore’s case highlights the grey area that exists for superyachts being used for both charter and private use in some jurisdictions. In Italy for example, a charter vessel can only be operated with a valid charter contract. And there are growing demands among fiscal advisors, for clarity as to whether the yacht will be private or commercial from the germination of the project.
Force Blue, the vessel at the centre of the case.
Writing for The Superyacht Group, Chris Allix, director at Dominion Marine Corporate Services, ruminated on the topic of a superyacht's status:“With the intricacies of owning and operating a yacht, it would be advisable that, from day one, every owner should be clear about what he or she wants to do with the vessel, especially if it is a new build. Is it purely for pleasure or is it for charter? The changing tax and regulatory requirements mean the mix and match approach is becoming increasingly complex. The impact of this is already evident. Some of our clients tell us they purchased a yacht primarily to enjoy it, but also do the odd charter. Times are changing and this type of usage is becoming a less viable option.
“At the new build stage, the choice of pure pleasure or charter should determine the nature of the build. Charter yachts have to comply with flag state commercial regulations but also be suitable and attractive for charter use. On the other hand, if an owner is having a pure pleasure yacht built, he or she can have it designed according to personal taste.”
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Dominion Marine Corporate Services Limited
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