**Newly leaked documents reveal how Roman Abramovich used a network of companies to evade millions in VAT through a superyacht leasing scheme.**
**Abramovich's Superyacht Scheme Exposed: A Decade of Tax Evasion Tactics**
**Abramovich's Superyacht Scheme Exposed: A Decade of Tax Evasion Tactics**
**In-depth investigation reveals Russian oligarch's complex tax dodging operations tied to luxury yachts**
In December 2011, just after taking delivery of his renowned superyacht Eclipse, Roman Abramovich appeared to be enjoying a Caribbean Christmas, despite it being chartered out to a British Virgin Islands-based company. This revelation comes from a comprehensive investigation undertaken by the BBC and the Bureau of Investigative Journalism, uncovering the Russian oligarch’s elaborate scheme that falsely categorized his luxury vessel fleet as a commercial entity to avoid enormous VAT payments associated with their purchase and maintenance.
Tax lawyer Tommaso Di Tanno described the findings as indicative of serious criminal misconduct, asserting, “There has been tax evasion.” Mr. Abramovich, who splits his time among Istanbul, Tel Aviv, and Sochi, has denied any wrongdoing, asserting reliance on professional tax guidance.
Over the years, the billionaire – sanctioned by the UK for his connections to Vladimir Putin’s regime – acquired five opulent yachts involved in this tax evasion scheme. Among these are the 115m Pelorus – famously lent to Chelsea’s John Terry during his honeymoon – and Eclipse, at 162.5m, which once held the record for the world’s largest private yacht, valued at nearly $700 million.
The investigation, part of the broader Cyprus Confidential project, explores over 400,000 files from MeritServus, a corporate service provider, revealing how Abramovich's intricate web of trusts and companies misrepresented his yacht leasing practices to dodge tax obligations in EU jurisdictions.
Documents suggest that the operation set up a false front with companies in Cyprus and the British Virgin Islands that appeared independent, despite being fully controlled by Abramovich. A 2005 memorandum outlined strategies to minimize VAT by ensuring overlapping ownership was disguised, asserting, “We want to avoid paying VAT on the purchase price of the yachts and where possible to avoid paying VAT on goods and services provided to the yachts.”
Experts suggest that the arrangements constituted an undesirable front; the charter agreements demonstrated methods that typically apply to commercial shipping, rather than the intended leisure boating use.
Legal scrutiny surrounding the yacht leasing scheme unfolded multiple times, with varying success. In Italy, legal cases were brought against Abramovich's yacht captains for tax issues, but lawyers swiftly intervened, resulting in withdrawals of those cases.
In Cyprus, tax authorities challenged Blue Ocean Yacht Management over an estimated €17 million in unpaid VAT. Despite their assertion of being a zero-rated entity for VAT due to alleged commercial operations, investigators found that these claims lacked credible proof of any business activity or commercial purpose. Ultimately, Blue Ocean faced a €14 million tax assessment, but reports indicate the firm dissolved shortly thereafter without fulfilling its obligations.
This complex web of deceit sheds light on the hidden realities of high-society yacht operations and the lengths to which wealthy individuals may go to circumvent tax liabilities. The findings contribute to the mounting narrative around the financial practices of those in close ties with Vladimir Putin’s regime and the broader implications of offshore tax avoidance.
