Tricky Tax issues

Ryanair accused in northern Italy of evading tax to value of €12m - The Irish Times - Wed, Oct 17, 2012: "THE PUBLIC Prosecution’s office in Bergamo, northern Italy, has accused Ryanair of tax evasion, estimated at €12 million.

Speaking to The Irish Times last night, Bergamo state prosecutor Maria Mocciaro said she expected to bring formal charges against Ryanair, chief executive Michael O’Leary, and the company’s legal adviser Juliusz Komorek, “very shortly”.

In essence, the state prosecutor argues that Ryanair has been treating its 220 employees at Bergamo’s Orio al Serio airport as “Irish” employees, with an Irish contract signed in Dublin. That way, the company has paid a lower rate of social security contributions, given that the Italian rate is 37 per cent as opposed to 12 per cent in Ireland.

Ryanair may well argue that it does not have permanent Italian headquarters and that its employees work for an Irish-registered airline. The state prosecutor, however, argues that the employees, to all intents and purposes, work in Italy and that therefore their social security contributions should be paid in Italy."

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