What is it with Europe and squeezing its millionaires dry? The continent is a leech for those who have to give up half of their earnings in taxes
Europe’s tax-exile club
Johnny Halliday (Image: Frédéric Loridant/ Wikimedia)
On 7 May, the EU Commissioner for Economic and Monetary Affairs Joaquín Almunia, 57, is due to present his spring trimester financial report. The EU has doubts whether its growth can continue at the present rate given that taxes are eating up almost 45% of the community’s GDP. At the same time, Ireland has lowered its rates of interest for businesses, whilst the UK is doing its own thing with business taxation. We look at some famous names who fled their native country to avoid having their taxes bled dry.
Johnny Hallyday - the Gallic Elvis
The cat-eyed, goateed iconic French singer is Europe’s most recent tax exile. In March 2007, right in the middle of the French presidential campaign, the 63-year-old applied for Belgian citizenship in his father’s native country. He also moved to a permanent residence in the German-speaking village of Gstaad, in western Switzerland. These decisions hit the French people hard in their hearts - and their pockets. The Swiss canton has a personal taxation ceiling of 21%, whilst in France, the state was taking 70% of the Que Je T’aime (‘That I Love You So Much’), rock star’s income.
Effectively, the sometime-actor was pouring 15, 000 Euros a day into the public coffers through taxes, either direct or on his properties. ‘I’m tired of being robbed every day as soon as I get up,’ he admitted to the press. But Hallyday was given a helping hand by influential friends - Conservative presidential lead candidate Nicolas Sarkozy demanded an immediate cap on income tax from huge personal fortunes during his electoral campaign.
Singing in the mountains (Photo: UNESCO)
Montserrat Caballé – high voice, short escape route
The Catalan soprano, 74, left her homeland in the mid-nineties to avoid the exorbitant amount she felt she was being taxed. The figurative ‘fat lady’ of the international opera scene literally took the shortest route by moving to Andorra, a tiny principality in the Pyrenees, which is less than 200 kilometres from her home town, Barcelona. According to the Bank of Spain, taxes in Andorra are on average 50% less there.
Arantxa Sánchez Vicario – former World no.1
Another Catalan, Arantxa Sánchez Vicario, makes our list. The Barcelona-born tennis player, 35, also headed for the Pyrenees hidey-hole, but her case was peppered with a little more controversy. The ‘Hacienda’, or the Spanish Inland Revenue/ tax office, ordered her to pay two and a half million Euros in income tax and VAT for the years 1989 to 1993, after determining that she resided less than six months per year in Andorra - the required amount in order to benefit from the tax breaks. Having eventually reached a deal, these days the former World no.1 has a foot on either side of the net, with a house in Andorra and another in Barcelona since 2000.
Bad serve for Becker (Photo: Andi Knap/ Flickr)Following on from Vicario’s ‘tax-ample’, we can generally define Europe’s sportsmen and women as prime candidates who run from the Taxman whenever he edges too close. The cases of compatriates and fellow former professional tennis players Boris Becker, 39, and Steffi Graf, 36, are memorable. BBC Wimbledon commentator Becker escaped a prison sentence in 2002 after being found guilty of tax evasion. He was found to be living in Germany whilst supposedly being a legal resident in Monte Carlo, a quarter of Monaco and one of Europe’s biggest tax havens. Becker escaped jail-time after admitting to having lied in court, and received conditional bail plus a fine of around 500, 000 Euros. After this fright, Becker moved to Switzerland. In the canton of Zurich he pays no more than 6.6% taxes.
In 1995 Becker’s court colleague, Graf, was accused of tax evasion, connected to the money she made early in her hugely successful career. However it was her father, manager and coach Peter Graf who paid for the fiscal irregularities of little Steffi, since it was he who handled the accounts. He spent four years behind bars, and his daughter was cleared of all charges after paying 1.3 million Deutschmarks. Nowadays, she keeps her millions in Swiss accounts, along with American husband and fellow former no.1 Andre Agassi.
Curaçao, biggest island and tax haven on the Dutch Antillas (Photo: Juan Nosé/ Flickr)In the business world there are hundreds of names trying to find financial relief in tax havens. Switzerland and Monaco are their favoured destinations. The ‘fat cat’ bosses of big companies tend not to move around themselves, mostly because of the pressure exerted by their native countries. Instead, a proportion of the business, its investment funds, are often filtered through accounts in the these fiscal paradises.
Such are the cases of Englishman and then permanent secretary of the Treasury Terry Burns and Spaniard Emilio Botín, 73. Both are the respective presidents of the Abbey and Santander banks respectively, who have such funds in the Bahamas, Jersey, the Isle of Man, the Cayman Islands and the Dutch Antilles. North American property tycoon Leona Helmsley, 87, once said that ‘only the little people pay taxes.’ Perhaps not so little once you’ve spent 18 months in prison, as the hotel operator and real estate agent did herself upon being convicted for tax evasion in 1989.
In-text photos: Montserrat Caballé (UNESCO), Aranxta Sánchez Vicario (Depth Fish/ Flickr), Boris Becker (plus micro photo: Andi Knap), Curaçao island and tax haven in the Dutch Antillas (Juan Nosé/ Flickr)
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