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NEW: Abramovich evaded millions in VAT with fake yacht hire scheme

Billionaire’s agents designed elaborate scheme to fool authorities – then wrote it all out in emails

Hi there,

It’s a bit of an understatement to say that superyachts are expensive. They cost a fortune to design, even more to build, and after that you still need a crew to sail them and a place to moor. Then there’s insurance, certifications, maintenance repairs … not to mention vast quantities of fuel. 

Among the uber-wealthy, they’ve long been the go-to status symbol for those wanting to display exorbitant wealth and power.

But even the super-rich need to keep their costs down – how about renting out your boat, a widespread scheme among Europe’s yacht owners? 

On the face of it, it seemed as if this is what former Chelsea FC owner, Roman Abramovich, was doing with his yacht, the Eclipse. (The aptly-named vessel is one of the longest yachts in the world, complete with 24 guest cabins, two swimming pools, helipads, and a disco hall.)

But it turns out all was not as it seemed. In fact he evaded millions in tax through a sham cruise scheme – and we’ve seen the emails proving it.

Scroll down to read the full investigation. 

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Abramovich evaded millions in VAT with fake yacht hire scheme

By Simon Lock

On Christmas Day 2011, Roman Abramovich stood in a linen shirt and shorts on the deck of his superyacht, the Eclipse. He was preparing to throw a lavish New Year’s Eve party at his vast estate on the Caribbean island of Saint Barthélemy, where guests would include Rupert Murdoch, George Lucas and Harvey Weinstein. 

They would be treated to caviar-topped canapes and Cristal champagne. Live music would come courtesy of the Red Hot Chilli Peppers. And the Eclipse – then the world’s longest superyacht – was the perfect place to host: the length of one and a half football pitches, it boasted 24 guest cabins, two swimming pools, two helipads and a disco hall.

It sounds like the definition of a luxury leisure activity. Yet the Bureau of Investigative Journalism (TBIJ) can now reveal that Abramovich had registered his yacht as a commercial vehicle under a sham cruise scheme that helped him dodge millions of euros in tax.

Leaked documents seen by TBIJ, the BBC and the Guardian show several of the Russian oligarch’s yachts were supposedly being used for business purposes. In fact, Abramovich was simply “hiring” the boats from himself through a series of companies he also owned, allowing him to falsely claim a VAT exemption for maritime businesses and evade levies on fuel, provisions, and maintenance and other costs.

The papers also show agents for Abramovich discussing their intention to dodge VAT on the entire price of the superyachts themselves, which could have amounted to tens of millions of euros.

The documents, part of the Cyprus Confidential project led by ICIJ and Paper Trail Media, show how members of Abramovich’s network created a fake cruise business on his behalf and deliberately tried to cover their tracks. They also point to how much tax was likely dodged in total, and ultimately reveal an illegal tax scheme.

Thanks,

Simon

Simon Lock
Reporter