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Old 10th Feb 2012, 00:22   #1 (permalink)
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taxman after Ryanair in Italy!!

Here'a google translation of the news appearing these days on Italian media.

«Ryanair non ha pagato contributi per 12 milioni» - Corriere Bergamo
"Ryanair has not paid
contributions to 12 million »
The issue was also raised in France and the company closed the base in Marseille. The company takes in Dublin rather than in Italy according to the labor inspectors

Airline tickets at bargain prices, but with some aplomb: the provincial labor disputes of Bergamo Ryanair to evading contributions to nearly 12 million as assumed in Dublin, rather than in Italy, its 650 employees who work in Lombardy and benefit of the national health system. One trick that would allow the giant low cost savings since the Irish taxation is much lighter than ours. For this labor inspectors to demand formally ask INPS 11 million 860 thousand euros to the company of Mr. O'Leary.

Here's the anomaly, according to the minutes of cool-fresh notification: while other foreign airlines that have employees take a second seat Italian Italian rules (such as Italy Lufthansa, Air France Italy), Ryanair sign contracts in Dublin where the taxation salaries for up to 32 thousand is less than 10% (by us nearly 70). In fact, however, Ryanair employees, although employees of Irish law, working in Italy, where they live and enjoy health benefits. In practice, enjoy public services that do not pay. The investigations were born after reports of CISL and Anpav (flight attendants) who complained of changes in competition for the presence of contributory schemes between different companies. So much so that 12 had closed, leaving 4,000 people on the street.

The application for an injunction based on the rule of Italian social security contributions subject to the personnel working in Italy working for a foreign airline to have here a "permanent establishment". This question has already been raised in France a few years ago, but when i first started popping up litigation, Ryanair announced the closure of the base of Marseille in order not to subject their staff to the French legislation. It remains to see how you would here in the event of disbursement Millionaire: If you had to leave the airport of Bergamo, the economic consequences for the airport and the armature would be heavy. An epilogue to avoid completely.

Italy, according to Ryanair, is the flagship of the Irish company, which provides a fifth of the traffic, they almost undermine the supremacy of the United Kingdom. And in turn Orio is the flagship of the Italian airports served by the carrier to Dublin. According to the Labour Inspectors of Bergamo, Orio Ryanair has entrusted to the local Sacbo, the management company of the airport orobico, equipped with computers, telephones and fax machines, shelves containing communications service, which are used by Ryanair staff (pilots and flight attendants flight), via an intranet connection service with a personal password, to agree with the Dublin office working arrangements. All crews go to the crew-room check-in and check-out and gather an hour before departure for a briefing. Moreover, the company has identified for each contract of employment base of service to which the employee is assigned, expressly providing for the obligation to live within an hour away. Inspectors write: "If the base is the place where it begins and ends work performance, it follows that Ryanair has identified the airport of Orio as the workplace." More than enough, according to inspectors, to qualify as a local headquarters building Ryanair working in Italy, and thus liable for contributions to Italian taxation.

Ryanair argues that in Italy has no permanent establishment. All decisions affecting employees, flights, customers and suppliers, routes and manner of execution of work performance, are taken in Dublin. Employment contracts, according to the company cheap, are governed by Irish law, the aircraft are registered in Ireland. All employees are paid by Ryanair's head office in Ireland, pay taxes and social security contributions to the Irish authorities and have a bank account in Ireland where the salary is credited. In a nutshell: Ryanair claims to be Irish in all its forms. For the Provincial Directorate of Labour of Bergamo, however, Ryanair is Irish but Italian, given that is based in Orio. At stake are nearly 12 million euros of unpaid contributions themselves (to be clear: most of the hole created by the City of Bergamo last three cycles). The power struggle has just begun.

Richard Nisoli8 February 2012
dannyalliga is offline  
Old 10th Feb 2012, 08:20   #2 (permalink)
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Good on the Italians. Mind you, somewhat ironic given the country's reputation for having a corrupt civil service.

According to my country's tax authorities, the dual-taxation agreement between European States merely gives tax payers living in one State but being paid in another, a right to receive credit against their tax liabilities in the state of residence.

In other words, if Italian tax rates are 10% higher than those in Ireland, and you live 183 days or more of the year in Italy, the Italian government are perfectly entitled to seek the 10% difference from you.

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Old 10th Feb 2012, 08:46   #3 (permalink)
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Personal tax liability is only a small part of it.

What Ryanair & their business model have ( & need to continue to do for the whole thing to add up) done is avoid paying social charges for their employees in the country where they work ( & effectively reside/ are employed in , never mind EI-??? on the side)
This has been achieved by an option that allows aviation workers to be classified as working where the "core business" of their employer is situated (Dublin in this case) & is AFAIK legal in Europe.
The French, & now Italians, have challenged this using their national law, hence why Ryanair closed MRS, & now. . . . . Italian bases ? ? ? well, the cost to FR would be enormous, what the Italian authorities need to do is weigh it up against the income they receive by FR feeding in millions of pax each year.
Saving these social charges is a fairly fundamental part of their business model, & a "half-reality" most of us have been saying for years, would have to be resolved one day.
Country by country the chickens are coming home to roost, as most European countries teeter on bankruptcy & scratch around trying to get some income wherever they can identify a possibility.

You can run, but you can't hide for ever.

Edited to say, for the avoidance of doubt they "have" been paying social charges (doubtless at a much more favourable rate than available in France/Italy etc) but in Ireland, for full time employees.
However. . . as 75-78% of pilots are now "self employed service providers" you can imagine they have cost FR nothing/nowhere as regards social contributions. For sure they have done a cosy deal with the Irish authorities involving something along the lines of "you turn a blind eye to the fact that we pay no social charges here for these lads, & we in return will tell them they have to set up a limited company & pay their taxes in Ireland, regardless of where they live/are based"

Unfortunately for FR, other Govts are not "in" on this deal, so the arrangement may not do them much good further afield.

Last edited by captplaystation; 10th Feb 2012 at 09:17.
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Old 10th Feb 2012, 09:58   #4 (permalink)
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This is good news if true.

I dont want to see RYR fail - i want to see them forced to play on a level playing field with other European companies. Then see how they get on. After all, RYR aren't the only airline in Europe - if they want to take their ball home, the others will soon take up the slack. Nobody will miss them...

It is not in any of our interests to see our own airlines driven to the wall by these people.
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Old 19th Apr 2012, 12:59   #5 (permalink)
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For anyone who has accepted a "little bit extra", which has degenerated over the last few years to a "big bit less", this is very good news indeed.
This one had to come home to roost one day, & it has.

Ryanairs business model has now been trashed, but who will pay. . . Ryanair, or the employees ? (take-home) pay cut on the way chaps/chapesses
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Old 19th Apr 2012, 17:22   #6 (permalink)
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A rise in employment costs in the range of 15-20% will hurt.
However it will not. The gross figure per employee will remain the same. Local taxes will be applied. The crews will be the ones who feel the pain. Pilots remain unwilling or unable to organise themselves and will be rolled over. Ho-hum.
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Old 19th Apr 2012, 17:40   #7 (permalink)
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However it will not. The gross figure per employee will remain the same. Local taxes will be applied. The crews will be the ones who feel the pain. Pilots remain unwilling or unable to organise themselves and will be rolled over. Ho-hum.
While I agree with you on the organizing ourselves bit I don't about the rest: local laws can be VERY different to those FR are used in Ireland and the UK and full of "socialistic" traps
dannyalliga is offline  
Old 19th Apr 2012, 18:42   #8 (permalink)
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The point is......Ryanair pilots who are now lumbered with the taxs etc will think very carefully as to whether it is worth continuing with their contracts. If enough leave, MOL will have to hike the package to compensate and I for one will be pleased to see it!
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Old 19th Apr 2012, 19:58   #9 (permalink)
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Amen to that ! !
reracked is offline  
Old 21st Apr 2012, 09:30   #10 (permalink)
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Your base is where you mostly start and finish= logbook/duty plan evidence.
Floaters?Well FR MUST give them a base in accordance to the law.
The law is the law and you cannot appeal it , you can only appeal a ruling but you better have some hard facts and so far the facts are all against this tax and social security scam.
It's not about increasing salaries, it's about living and working according to the law; if the salaries are shyte then it'up to us to NEGOTIATE a deal with a company that posts 500mln euros NET profit on average since I joined them a few years ago.
Bear in mind that in many EU countries,unlike ireland, you will have rights as a worker and the company will have to abide by them and that includes union representation or equality between contracts for the same professional role just to name a couple.
Unions across the EU are gearing up against FR and it's dodgy ways and be sure it won't be long before change will be imposed upon them.
We should just play our part and be ready to oppose the predictable bullying by sticking together ,joining a union and educating ourselves on what are our rights as workers.
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Old 22nd Apr 2012, 06:21   #11 (permalink)
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It seems ironic to me that, as one of the few truly european carriers, Ryanair is being targeted in this way. Has more to do with the protection of national carriers, many of which are in poor shape, than anything else. So much for a European Union!
Bergholt is offline  
Old 22nd Apr 2012, 11:07   #12 (permalink)
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Bergholt :
1- tax evasion
2- social security contribution scam
3- dodgy FTL practices with an IAA blind eye
4- tax payers money used to subsidize FR and the forgotten airports where they operate
5- pay to work scam for both pilots and flight attendants
6- immoral working practices ( if you don't sell enough you're fired, if you are sick you get no salary,if you want to change yor base your salary reduces......)
7- contracts that pose legal issues in most EU countries

Just to name a few.
Want a truly European carrier that doesn't have anything to fear , that plays by the rules in the same sector and that still makes money? Easyjet.
This is not the 1800 and slavery should be long gono from our societies my friend , open your eyes to what FR was able to do in the name of profit and cheapness.
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Old 22nd Apr 2012, 11:33   #13 (permalink)

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Make no mistake that Ryanair will NEVER conform to it's legal tax liabilities, that is whole reason that the company is still in business. Using a pilot workforce number of 3000, crunch the numbers and you'll quickly see that FR would be loss making if it contributed legally as all the others do. Net result is that the workforce is responsible for FR's profits and that's not fiction, think about it!

So what does this mean for the future? Well, judging by past senior management behaviour they would pfefer to shut the airline down rather than pay taxes and start losing millions each quarter. MOL would never be happy in treating his staff as normal working people with basic human rights. I'm sure that he would prefer to get his team of Dublin tinker men in to cut up the aircraft and 'weigh them in', and that would be a cash deal too

IMHO - The future is bleak as all the FR senior management have milked the company and are multi millionaires. Ask yourself this -- Are they loyal to staff, are they loyal to the airport authorities, are they loyal to anyone you know except each other? The simple answer is NO, which means at then end of the day they will not be loyal to their bosses, the shareholders. Windng it down for spiteful reasons is a very realsitic future outcome.
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Old 22nd Apr 2012, 11:41   #14 (permalink)
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whilst it may be true that alot of EU regulation is about protecting 'legacy' interests in many industries, I don't think this is. I'm an employee of a legacy airline, but I also run my own business so I have an interesting perspective from both sides of the employee / employer fence. I've got no problem with competition, even hard-nosed cut-throat competition. What i do have a problem with, as do many, is trying to compete against someone who doesn't play by the rules. Ryanair do not pay their social contributions. (my employer not only pays my tax on a PAYE basis, but also pays 12odd % employers NI contribution - FR do not pay this.) FR also do not abide by many of the passenger compensation rules. Whilst most other airlines end up writing large cheques for volcanoes, ATC strikes etc etc, FR just shrug their shoulders and walk away.
By all means have FR as a pan-european airline , offering competion and choice for the customer, but we need the competitiion to be on a fair basis and level playing field.

I just wish the british government would have the plums to take them to task about the UK bases. All the retoric recently about tax-evasion coming out of whitehall could equally be applied to FR in the uk.
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Old 22nd Apr 2012, 12:52   #15 (permalink)
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The UK government would never bring RYR to task over alleged tax irregularities as they are far to large an employer both here and in Europe.

While they (UK HMRC) may gain by a win against RYR w.r.t. tax, any gain would only solicit adverse publicity against the incumbent government by them (RYR) either vastly reducing workforce, or shifting operations entirely out of the U.K. - government then accused of losing employee's their positions in a "well paid job", a whole trench of pilots/cabin crew/ground crew/admin staff etc., all possibly claiming unemployment benefit, associated employers who supply RYR would also suffer in similar ways.

I don't disagree neccessarily with the notion of RYR paying it's dues as per other employers, just can't see it happening for reasons stated above. Life unfortunately does not profer a level playing field to all in similar walks of life.
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Old 22nd Apr 2012, 13:26   #16 (permalink)
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can see your point and it is unfortunately likely to be true. Pity the UK government don't take such a pragmatic view elsewhere. After all APD, excessive taxation (50% tax rate), rediculous employment legislation etc all reduce economic growth and employment growth.
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Old 22nd Apr 2012, 13:45   #17 (permalink)
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If a business is run illegally and it needs to be shut down then be it.
The mafia also employs thousands and has a turnover that exceeds that of entire countries but no one would hesitate a minute to shut them down.
Afterall if FR carries 80 million passengers then the next day some else will give them a lift, it won't be 80 million anymore (I'd say 1/4 of them shouldn't travel anyways since they are a disgrace for the entire human kind) but at least they will be flown from A to B according to basic moral principles.
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Old 22nd Apr 2012, 13:57   #18 (permalink)
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Not disagreeing with you there Dannyalliga, if it's run illegally then it SHOULD be shutdown/investigated etc. - but this isn't an ideal world, and we all know that nothing will or would happen.

As for the mafia being shutdown.....correct, but again, they won't be shut down completely for the similar reasons - and perhaps that legal argument most likely would result in an outcome that leaves no manouvering.
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Old 22nd Apr 2012, 19:53   #19 (permalink)
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All these tricks and smoke and mirrors way of making profit have been known for years. I've been amazed why the competitors have not demanded a level playing field from the relevant authorities. When fuel surcharge cartels were suspected, and other cartels for charges to pax, the innocent victimised competitors went to court and mostly won their case. Why not this time. Were they scared of RYR's zillions? That wouldn't matter if they were sure and won their case. Either way the PR effect would have been interesting.
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Old 22nd Apr 2012, 22:52   #20 (permalink)
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The problem is the social and economic impact when an airline such as giant Ryanair decides to pull the plug in a specific airport. Hundreds/ thousands of indirect jobs are in line. The airline knows that and makes regular threatening campaigns in the press about it
That's disengenuous at best and downright at best. If there is demand for travel from that airport and FR throw their toys out and storm off then someone else will step in - someone who will probably employ people AND pay their taxes.

BUT FR are not stupid they won't just storm off - they will whinge and moan, but will end up paying their dues, even if it reduces their margin. After all 50% of something, is better than a 100% of nothing.. Either way they should be taken to task.
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