06/06/25

CYPRUS: ‘It is not possible’: Cyprus powerless to claim Abramovich’s €14m tax bill

As published on: thebureauinvestigates.com, Friday 6 June, 2025.

Cyprus tax authorities faced stark questions last week for the failure to collect €14m in unpaid VAT due on Roman Abramovich’s fleet of luxury superyachts.

Sotiris Markides, the tax commissioner, told the Cyprus parliament that procedural loopholes had made it impossible to collect the money owed as the result of the elaborate tax-dodging scheme revealed in January by the Bureau of Investigative Journalism (TBIJ).

TBIJ’s investigation, in partnership with the BBC, the Guardian, OCCRP and its Cyprus-based partner CiREN, showed that the oligarch had used a network of offshore companies to set up a sham cruise-rental scheme and dodge millions in VAT.

At the heart of the arrangement was Blue Ocean Yacht Management, a Cyprus-registered company ultimately belonging to Abramovich, which was first flagged to tax authorities in 2012.

After a decade-long legal battle, the supreme court ruled in March 2024 that Blue Ocean owed €14m in tax. But by then, the company had no directors or legal representatives and was subsequently wound up without having paid.

Abramovich evaded millions in VAT with sham yacht hire scheme

At a parliamentary committee session last Thursday, Markides said procedural barriers meant it had never been possible to hold Blue Ocean and its directors to account, according to reporting by CiREN.

“The law is clear. I may not agree with it, but we couldn’t take enforcement action until court proceedings were over,” said Markides. “As a matter of fact, due to the absence of a legal entity and active representatives, it is not possible to recover the said debt – not even through a company revival process.”

He called for legislative reform to close these loopholes. “We need changes to prevent companies from hiding behind legal gaps and faceless structures,” he said.

Opposition MP Alexandra Attalides pressed tax officials on whether the scheme had ever been properly scrutinised.

Officials from Cyprus’ Financial Intelligence Unit and Registrar of Companies told parliament that Abramovich’s connection to Blue Ocean had never been formally investigated.

TBIJ’s investigation in January showed how Abramovich’s use of a complex network of offshore entities allowed him to falsely claim a VAT exemption for maritime business and evade levies on fuel, provisions, maintenance and other costs.

The story was published as part of Cyprus Confidential, an international collaborative investigation launched in 2023, led by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media, based on documents from a corporate service provider originally obtained by the whistleblowing group Distributed Denial of Secrets.

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Representatives for Abramovich said he obtained independent professional tax and legal advice and acted in accordance with it. He denied knowledge of any alleged deception to evade taxes and said he was not liable for any scheme.

But the documents show the oligarch’s superyachts were each owned by separate companies registered in the British Virgin Islands (BVI), which were all owned by a single trust. And the trust ultimately belonged to Abramovich.

Each of the BVI companies then leased the boats out to Blue Ocean, which in turn leased them out for week-long cruises, generating huge profits. Leaked documents show that the “customers” hiring the yachts were simply another set of BVI companies, all of which again ultimately belonged to Abramovich.

It meant Abramovich was essentially the yacht owner, the service provider and the customer – and was thereby falsely claiming a tax exemption.

Tax should have been due in Cyprus – where Blue Ocean was based – and in the various EU countries where the yachts frequently cruised, refuelled and were maintained, including Germany, Italy, France and Spain.

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Cyprus VAT Tax evasion Abramovich