Ryanair accused in northern Italy of evading tax to value of €12m
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.
The investigators also point out that Ryanair requires its Bergamo employees to live within one hour’s drive of the airport, while 112 of the 220 personnel who feature in this two-year long inquiry list their official residence in the greater Bergamo area.
Ryanair’s position has further been complicated by the initial findings of a separate inquiry by the Guardia Di Finanza in Bergamo which claims that various Ryanair employees have registered with the Italian social security and pensions institute. The finance police believe that employees requested the right to avail of the Italian national health service, a so-called AI document.
Once granted an Italian health card, Ryanair hostesses were entitled to free medical treatment when travelling. However, the finance police argue that such medical treatment is not actually free but rather the tab is picked up by the country issuing the health card. In other words, the finance police said, when it came to social security, the Ryanair employees were Irish but when it came to health benefits, they were Italian.
State prosecutor Ms Mocciaro last night said the health benefits issue was a “separate” matter and did not enter into her investigation which has been closed. Last night, Ryanair issued the following statement: “Ryanair does not comment on rumour or speculation and will continue to observe EU tax laws.”