Russian investor has big tax bill in France

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Vitaly Malkin and Courchevel (Wikipedia)

A French court ordered a Russian businessman to pay a tax bill of $ 1.7 million on a ski resort in the French Alps because he did not prove that he owned it.

The tax is designed to suppress the use of shell companies to own property in the country, which can help reduce the owner’s real property tax, according to Bloomberg.

Vitaly Malkin owns the station through a Luxembourg-based shell company. The three percent tax has no deductions, which makes it higher than the traditional property tax.

In other words, he would pay a lower tax if he owned the complex under his own name. Malkin tried to prove that he owned the property in order to collect the lowest tax, but the judges decided that he did not do so.

Parisian lawyer Arnaud Tailfer said that while it is clear that Malkin is the owner of the property, the proof of ownership he provided did not meet France’s burden of proving the property.

“Since the shareholding of limited liability companies need not be kept up to date in Luxembourg or in places like Guernsey, it is extremely difficult to prove ownership,” said Tailfer.

Among the documents submitted by Malkin as proof of ownership were demolition and construction permits issued by local authorities for work on the ski resort, as well as documents showing that he and his wife were the guarantors of a loan granted to the entity that purchased the property. [Bloomberg] – Dennis Lynch

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