Ryanair faces allegation of tax evasion in Italy

Ryanair has declined to comment on reports that chief executive Michael O’Leary and another senior executive face an investigation in Italy into alleged tax evasion.

The probe, reported by Italy’s Corriere della Sera, concerns Ryanair’s hiring of 220 staff at Bergamo airport near Milan while putting them on the books in Dublin, where tax rates are lower.

Estimating the loss to the Italian state at €12 million in taxes, magistrate Maria Mocciaro gave the airline 90 days to settle its account, an offer Ryanair turned down, the newspaper reported.

Although the airline’s Bergamo staff are required to live near the airport, Ryanair claims they work on board Ryanair aircraft and their taxes should be paid in Ireland, the home of the carrier, the Guardian reported.

O’Leary and the airline’s legal affairs director Juliusz Komorek are reported to be under investigation by an Italian prosecutor for alleged tax evasion.

A Ryanair spokesman declined to comment on the report, saying that the airline would “continue to observe EU tax laws”.

A representative of Italy’s airline association reportedly said Ryanair was flouting Italian rules.

“Given that Ryanair operates stably in Italy then I cannot understand why the rules it follows are different to those followed by other carriers including easyJet,” said Aldo Bevilacqua, general secretary of Assaereo. “Ryanair’s trick has been tolerated until now.”

But a Rome-based aviation consultant Nick Brough said the rules were not clear.

“This is a grey area. Ryanair has been very careful to avoid having any fixed place of business in Italy which would make it liable to pay tax here. In France they changed the rules to make Ryanair pay taxes, but I don’t see what this magistrate can achieve here unless the rules are changed,” he told the Guardian.

Ryanair flew more than 22 million passengers to and from 21 Italian airports last year, second only to the flag carrier Alitalia, which flew nearly 26 million passengers. This year the Irish airline expects to reach 24 million passengers, and 37 million within four years.

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