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| Italy's tax authorities target art world | Italy's tax authorities target art world |
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| They have raked through business accounts in upmarket ski and beach resorts; they have made spot checks on the owners of high-powered cars and luxury yachts; some have even donned swimwear to root out tax-dodging by the firms that rent umbrellas and loungers to sunbathers along the Italian coast. But it was only on Thursday,Italy's tax sleuths revealed a new target for their searchlight: art. | They have raked through business accounts in upmarket ski and beach resorts; they have made spot checks on the owners of high-powered cars and luxury yachts; some have even donned swimwear to root out tax-dodging by the firms that rent umbrellas and loungers to sunbathers along the Italian coast. But it was only on Thursday,Italy's tax sleuths revealed a new target for their searchlight: art. |
| The semi-militarised revenue guard, the Guardia di Finanza, said two "noted art galleries" in Rome and the north-eastern city of Padua had been temporarily closed as the result of a sweeping investigation into tax fraud and money laundering in the art world. | The semi-militarised revenue guard, the Guardia di Finanza, said two "noted art galleries" in Rome and the north-eastern city of Padua had been temporarily closed as the result of a sweeping investigation into tax fraud and money laundering in the art world. |
| It said 24 galleries and auction houses had been targeted with help from the copyright office of Italy's arts and entertainments industry. The revenue guard said it had succeeded in tracking down more than €2m of unpaid taxes on so-called artists' resale rights (ARR). | It said 24 galleries and auction houses had been targeted with help from the copyright office of Italy's arts and entertainments industry. The revenue guard said it had succeeded in tracking down more than €2m of unpaid taxes on so-called artists' resale rights (ARR). |
| Known in Italian as diritto di seguito, ARR entitles the creator of a work of art to a percentage fee each time it is resold by an auction house, gallery or dealer. The statement did not make clear whether the tax was payable on ARR paid to, or withheld from, the artist or artists in question. | Known in Italian as diritto di seguito, ARR entitles the creator of a work of art to a percentage fee each time it is resold by an auction house, gallery or dealer. The statement did not make clear whether the tax was payable on ARR paid to, or withheld from, the artist or artists in question. |
| The guard said it had also uncovered illicit investments and evidence of money-laundering offences involving much bigger sums. It said it had tracked around €3m in cash payments above the permitted limit and suspicious transactions worth some €14m that had not been reported to the authorities by the auction houses that had dealt with them. | The guard said it had also uncovered illicit investments and evidence of money-laundering offences involving much bigger sums. It said it had tracked around €3m in cash payments above the permitted limit and suspicious transactions worth some €14m that had not been reported to the authorities by the auction houses that had dealt with them. |
| Italy's revenue guard has been given an increasingly free hand to clamp down on tax evasion as Italy struggles to close the gap between its state income and expenditure so that it can start paying off a public debt of almost €2 trillion. | Italy's revenue guard has been given an increasingly free hand to clamp down on tax evasion as Italy struggles to close the gap between its state income and expenditure so that it can start paying off a public debt of almost €2 trillion. |
| In December, its officers made the first in a succession of headline-grabbing raids on hotels, restaurants and shops in resorts frequented by the rich. Soon after a non-party government headed by a sober economics professor, Mario Monti, took office, they swept into the Alpine resort of Cortina d'Ampezzo, where they stopped more than 100 high-powered cars and cross-checked by computer to see what sort of incomes their owners were declaring on their tax returns. They found more than a third were claiming to earn less than €22,000 (£17,500) a year. A similar proportion came under suspicion as the result of a more recent check on yachts berthed on the Adriatic coast. | In December, its officers made the first in a succession of headline-grabbing raids on hotels, restaurants and shops in resorts frequented by the rich. Soon after a non-party government headed by a sober economics professor, Mario Monti, took office, they swept into the Alpine resort of Cortina d'Ampezzo, where they stopped more than 100 high-powered cars and cross-checked by computer to see what sort of incomes their owners were declaring on their tax returns. They found more than a third were claiming to earn less than €22,000 (£17,500) a year. A similar proportion came under suspicion as the result of a more recent check on yachts berthed on the Adriatic coast. |
| The revenue guards have also found widespread evidence of luxury boutiques not giving out tax receipts as required by law. Since the raid on Cortina d'Ampezzo, establishments in Portofino on the Italian Riviera and in Rome and Florence have also been targeted. | The revenue guards have also found widespread evidence of luxury boutiques not giving out tax receipts as required by law. Since the raid on Cortina d'Ampezzo, establishments in Portofino on the Italian Riviera and in Rome and Florence have also been targeted. |
| More than €100bn of income is believed to go undeclared each year, and Italy's underground economy is estimated to account for about 17.5% of its gross domestic product. | More than €100bn of income is believed to go undeclared each year, and Italy's underground economy is estimated to account for about 17.5% of its gross domestic product. |
| The culture of tax-dodging took root under the Christian Democrats, who dominated most of Italy's post-war governments until the early 1990s. It was seen as a way of encouraging small, family-owned businesses. But the result has been to create a sharp division between the self-employed, many of whom pay little or nothing to the treasury, and employees, who have high taxes deducted from their wages at source. | The culture of tax-dodging took root under the Christian Democrats, who dominated most of Italy's post-war governments until the early 1990s. It was seen as a way of encouraging small, family-owned businesses. But the result has been to create a sharp division between the self-employed, many of whom pay little or nothing to the treasury, and employees, who have high taxes deducted from their wages at source. |
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