Roman Abramovich allegedly ‘dodged millions in tax’ with fake superyacht hire scheme
A joint investigation by major international news outlets has claimed that Russian oligarch Roman Abramovich allegedly avoided tens of millions in taxes through a complex offshore scheme involving his superyachts.
The scheme, which ran from 2005 to 2012, allegedly falsely classified at least five of his luxury vessels as commercial charters, allowing him to sidestep VAT payments on their purchase and operation.
The investigation was conducted by the BBC and the Bureau of Investigative Journalism, with media partners including the Guardian, Der Spiegel and ZDF. These outlets have been reporting on leaked files since 2023 as part of the International Consortium of Investigative Journalists’ Cyprus Confidential investigation. These files previously revealed Abramovich’s financial links to one of Vladimir Putin’s closest associates, who was accused of holding the president’s wealth.
Roman Abramovich at the 2019 UEFA Europa League Final. By Fars Media Corporation via Wikimedia.
The new allegations claim that Abramovich’s superyacht fleet, which included the 162-metre Eclipse–once the world’s largest yacht–was owned by companies registered in the British Virgin Islands, which were controlled by a Cyprus-based trust benefitting Abramovich. The reports claim these vessels were then leased to Blue Ocean Yacht Management, a Cyprus-based firm also connected to the billionaire. Blue Ocean, in turn, allegedly chartered the yachts to other companies secretly owned by Abramovich, creating an illusion of legitimate commercial activity.
It is claimed this arrangement allowed Abramovich to avoid paying VAT on the yachts’ purchase prices, which would have amounted to around 20 per cent in the European Union. Additionally, it is claimed the scheme allowed him to evade taxes on fuel, maintenance, and other services related to the yachts. For example, Eclipse required up to $2m to refuel, which would have incurred an additional $400,000 in VAT per refill. Between 2005 and 2012, Blue Ocean’s fuel costs alone exceeded $15m, giving an insight into the amount of tax that could have been avoided through such a scheme.
The investigation has also uncovered evidence of alleged fraudulent practices, with the charters not always corresponding with real boat trips. Sometimes they gave a location for the cruise which – according to maritime traffic data seen by investigators – did not match the yacht’s actual location.
It is also alleged that — on over 150 occasions — contracts were backdated to facilitate tax-free fuel purchases. In one case, a charter appeared to be backdated to buy VAT-free fuel on the French Riviera. The document saved Blue Ocean $44,000, according to investigators.
Blue Ocean’s financial records showed that the company made little profit during the period, which is unusual for a legitimate charter business. The lack of profit meant minimal corporation tax was paid, which the report highlights as a reason for suspicion.
M/Y Eclipse was once the world’s largest private yacht. Image courtesy of Moshi Anahory via Wikimedia.
Rita de la Feria, a professor of tax law at Leeds University, tells the Guardian that the Blue Ocean scheme “does look like an artificial structure in order to avoid paying the tax”.
She adds: “Whether it is avoidance or evasion depends on whether in essence the business in question misrepresented information or concealed information.
“Now, from the documents that I have seen […] it does appear that there was some misrepresentation. If there is a misrepresentation of information we are now passing the threshold from avoidance to evasion.”
Abramovich’s legal team has denied any wrongdoing, asserting that he always sought and followed expert tax and legal advice. They also maintain that he was unaware of any tax evasion activities and should not be held personally responsible. Emails seen by the investigators show that among Blue Ocean’s advisers on the VAT status of Abramovich’s yachts was Deloitte, one of the world’s most prestigious accounting firms.
Abramovich himself, now living in exile in Turkey after being sanctioned due to alleged ties to the Russian government, has also denied any involvement in deceiving authorities to evade tax payments.
Cyprus’s tax officials were separately pursuing Blue Ocean for unpaid taxes amounting to more than €14m between 2005 and 2010, disputing the company’s claim to be “zero-rated” for VAT because it was a commercial operation.
In a 2018 appeal judgment, VAT investigators determined that Blue Ocean had failed to provide evidence showing that the companies chartering the yachts were “engaged in economic activity.” As a result, the claim that the yachts were being used for commercial purposes was dismissed.
Ultimately, Cyprus pursued Blue Ocean for a reduced amount of €14m (£11.8m). The company did not attend its appeal in March 2024 and was dissolved just four months later.
When asked by investigators whether Blue Ocean ever paid the tax bill that Cyprus determined was due, lawyers for Abramovich did not comment.
The post Roman Abramovich allegedly ‘dodged millions in tax’ with fake superyacht hire scheme appeared first on Marine Industry News.
