An investigation has found that Russian oligarch Roman Abramovich saved millions of euros through a scheme in which five of his superyachts were falsely classified as commercial vessels, reports Euronews.
The strategy, developed by his network, allowed the billionaire to avoid paying VAT in European countries where his boats received services such as refuelling.
Private vessels are subject to sales tax, which is usually levied by EU members at around 20%.
However, five of Abramovich's superyachts - including Eclipse, which at one point was the world's largest - evaded the requirement between 2005 and 2012 by claiming they were chartered to clients.
A joint investigation by the BBC, the Guardian and the Bureau of Investigative Journalism revealed that this did not actually happen.
The boats were chartered and managed by Blue Ocean Yacht Management, a Cyprus-based company controlled by Abramovich. This company then rented them out to "clients".
Leaked files from Cyprus show that all the clients were British Virgin Islands registered companies owned by Abramovich himself.
Lawyers for the Russian billionaire said he had always sought and acted in accordance with expert tax and legal advice.
They added that their client was unaware of the scheme and denied any personal responsibility.
The scheme was explicitly described in an email sent in 2005 by Blue Ocean director Jonathan Holloway, who recently said he could not be expected to remember "the individual circumstances of every ship I have ever managed".
"We want to avoid paying VAT on the purchase price of the yachts and, where possible, avoid paying VAT on the goods and services provided to the yachts," Holloway said.
European authorities have taken action against Blue Ocean in the past, but it seems they were not fully aware of the yacht scheme.
In 2015, prosecutors in the Italian port of Trieste sought to recover €500,000 from Blue Ocean for allegedly unpaid bunkering debts.
The case was dropped after Abramovich's partners claimed his yachts were being used for commercial purposes.
In 2012, authorities in Cyprus challenged the firm's VAT exemption claims, alleging that it owed more than €14 million in unpaid taxes for the period December 2005 to August 2010.
The company's lawyers challenged this, but in March last year the Cyprus Supreme Court rejected their appeal. Four months later, Blue Ocean was liquidated. | BGNES