Europe Cracks Down on Luxury Yacht Tax Dodge, Citing Paradise Papers

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The European Commission is taking action against three EU member states for failing to collect sufficient value added tax (VAT) on yachts.

Pierre Moscovici, the EU’s commissioner for taxation, started formal infringement procedures against Cyprus, Greece and Malta for allowing yacht owners to pay less VAT than they should.

In particular, the commission argues, these three countries have developed local VAT rules that are unlawful because they favor buyers of large luxury yachts that sell for tens of millions of dollars.

In order to achieve fair taxation we need to take action wherever necessary to combat VAT evasion,” Moscovici said.

Practices in Greece, Cyprus and Malta  distort competition in the maritime sector, violate EU law “and must come to an end,” he said.

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