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The 1% are being hampered by France’s anti-shell company levy

Vitaly Malkin and Courchevel (Wikipedia)

Vitaly Malkin and Courchevel (Wikipedia)

A French court has ordered a Russian businessman to pay a $1.7 million tax bill on a ski resort in the French Alps because he failed to prove he owns it.

The tax is designed to crack down on the use of shell companies to own properties in the country, which can help reduce the true owner’s property tax liability, according to Bloomberg.

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

In other words, he’d pay a lower tax if he owned the resort under his own name. Malkin tried to prove he owned the property in order to be charged the lower tax, but the judges ruled that he failed to do so.

Parisian lawyer Arnaud Tailfer said that while it’s clear Malkin owns the property, the proof of ownership he provided didn’t meet France’s burden for proving ownership.

“As the shareholding of limited liability companies doesn’t have to be kept up to date in Luxembourg or in places such as Guernsey, it’s exceedingly difficult to prove ownership,” Tailfer said.

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

The post The 1% are being hampered by France’s anti-shell company levy appeared first on The Real Deal Chicago.

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