Sacrebleu! Ryanair raided in tax evasion accusations
The cost of French payroll tax is several times higher than other countries in the EU - a significant amount of argent if you employ several hundred staff based in France working for your budget airline. Last month, easyJet was found guilty of travail dissimulé — the employment of undeclared workers — after hiring 170 staff at Orly airport in Paris and having them sign more favourable British contracts. easyJet insisted it had not knowingly broken the law, but was ordered to pay €1.4 million to the French state regardless.
The ruling set a precedent, and now the French government is gunning for Ryanair; the SkyMarshall is under investigation for allegedly evading up to £3.9 million in payroll taxes.
According to the Belfast Telegrah, Ryanair is suspected of employing 120 people in France on Irish contracts, and thereby dodging the payment of taxes that cost up to three times more than in Ireland. French officials recently raided Ryanair's offices at Marseilles airport as part of the investigation.
It could be the ultimate case of cutting off your nose to spite your face; Ryanair is already receiving up to €35 million per year in taxpayer's money to service regional airports in France; Air France/KLM is already taking the budget airline to court over the level of these subsidies.
According to the Irish Times, subsidies to Ryanair amounted to €32 per passenger at Rodez Airport, in France, where the airline received at least €3.2 million between 2004 and 2006 for just three flights per route per week. In the South West of the country, Ryanair received €2.3 million worth of subsidy from Bergerac airport, which itself needed annual local government subsidies of €500,000 to prevent it going bankrupt.