Ryanair hit with €12m claim

Ryanair is being investigated in Italy for allegedly dodging around €12m of social security payments.

Prosecutors in Bergamo, near Milan, where the Ryanair-operated airport Orio al Serio is based, allege the no-frills airline avoided heavier taxation in Italy by paying lower pension fees in Ireland for staff flying in and out of Bergamo.

It is understood that the investigation into Ryanair chief executive Michael O’Leary has been on going since Jun 2010 for his role as legal representative of the group.

The airline’s legal and regulatory affairs director Juliusz Komorek was also being investigated.

INPS has started similar legal actions in several Italian cities where Ryanair operates. Ryanair declined to comment on the specific case but said it respected EU fiscal regulations.

“Ryanair does not comment on rumour or speculation and will continue to observe EU tax laws.”

INPS claims that Ryanair did not pay around €12m, including fines, for social security taxes on its 220 employees based in Bergamo.

The airline has appealed and a civil court hearing is scheduled in Feb 2013.

Ryanair says it followed EU regulations allowing budget airlines to apply the cheapest social security fees available, independent of where staff are based, the legal source said.

New EU rules state that pilots, stewards and hostesses will pay taxes where their “home base” is, or where they start and finish their service. However, carriers will have 10 years to comply with these rules, the source added.

Meanwhile, a rival to Ryanair’s takeover bid for Aer Lingus has emerged with Etihad chief executive James Hogan, stating again that the airline would consider buying the Government’s 25% stake.

“If the Irish Government approached us to look at the stake, then we would do so. But they have still not approached us.”

Reuters