Yachts Raided by Tax Authorities in Italy
August should be the high season for yachters lounging off the coast of Italy. But this summer, many are staying clear to avoid a new threat: tax authorities.
Yacht brokers say that mega-yachts sailing off the Tuscan and Amalfi coasts have been increasingly targeted by tax inspectors looking for revenue. The tax inspectors, who often board the boats at marinas, are carrying out what Italian Prime Minister Mario Monti last week called “a state of war” against tax evaders.
Many yacht owners in Europe claim exemption from VAT taxes or claim low taxable incomes, despite owning a yacht. Tax authorities are finding that yachts are rich pickings when it comes to high-income tax evaders.
“A lot of our clients are just steering clear of Italy this season,” one yacht broker said. “Who wants their holiday interrupted by the tax police?”
The crackdown may be raising revenue, but they are also chasing away boats and businesses. One radio report said that some 30,000 boats have fled their berths in Italy since the tax crackdown was first announced in March. At Cala Galera, a large private marina on the Tuscan coast, business is reportedly down about 40 percent. (Read more: The World's Largest Yachts)
The “yacht exodus” has cost the Italian economy $350 million in lost revenues, according to the report.
The crackdown is all part of the government’s efforts raise revenue and patch up its fiscal holes in the wake of the Euro crisis. Armed Italian police boarded a 207-foot yacht owned by Italian billionaire and auto-racing tycoon Flavio Briatore, claiming he owed millions in unpaid taxes. (Read more: Supercar Sales Die as Italy Nabs Tax Cheats)
Briatore threatened to close his nightclub in Italy’s Costa Smeralda, saying, "Italy is now a country where, if you own a yacht and tie up in port, you are either a bandit or a thief."
-By CNBC's Robert Frank
Follow Robert Frank on Twitter: @robtfrank