Italians Are Selling Their Ferraris To Avoid Tax Scrutiny

Ferrari 612

via flickr” url=”http://www.flickr.com/photos/ejcallow/2975105506/sizes/o/in/photostream/”]Italy may be synonymous with Ferrari, Lamborghini, Maserati, and Ducati for car enthusiasts the world over, but they may no longer be as popular as they used to be in their home country.More and more Italians with flashy luxury cars have been returning them to dealerships in exchange for cheaper, more sedate models, Bloomberg reports. This is not the result of a decline in popularity though, but an attempt to escape the scrutiny of the tax man.

In an attempt to bolster the nearly empty state coffers and stave off a debt default and bailout (Italy’s debt is 1.9 trillion euros, or $2.5 trillion), Italian Prime Minister Mario Monti has not only raised taxes on luxury goods, expensive cars, and fuel, but has also stepped up attempts to curb tax evasion, which costs the government 120 billion euros ($159 billion) a year in lost revenue.

As a result, authorities have set up checkpoints in various parts of Italy, and drivers of expensive cars are regularly stopped for questioning. Their licence and registration information is passed on to the national tax agency, Agenzia delle Entrate, which checks if the drivers had enough declared income and paid enough taxes to afford their cars.

Bloomberg reports that tax agents have found owners of luxury cars with no declared incomes, no tax records, and on welfare, to name a few.

While tax authorities reject being the cause for a slump in car sales, the facts point to the contrary. Demand for Ferraris, Maseratis, and Lamborghinis slumped 53 per cent in January, with just 66 supercars sold, according to Anfia, the association of Italian carmakers. Marco Santucci, general manager of Tata Motors’ Jaguar brand in Italy, said sales are shifting towards cheaper versions with smaller engines.

A dealer told Corriere Della Sera that while some people were even resorting to foreign licence plates to escape scrutiny, the price of luxury cars had plummeted; the first devaluation in three years. “A Bentley was sold at list price until a few months ago. Now the supercar remains unsold even with discounts up to 30 per cent,” he said. 

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