The BBC and the Bureau of Investigative Journalism uncovered evidence that Russian billionaire Roman Abramovich utilized a complex scheme to evade millions of euros in taxes on his private yachts in EU waters.
Abramovich used companies he controlled to inaccurately present his fleet of luxury yachts as a commercial leasing operation to avoid taxes on their purchase and operational costs.
The yachts were leased by a company in Cyprus called Blue Ocean Yacht Management. An uncovered memorandum from 2005 outlined the intention to avoid value-added tax.
"We want to avoid paying VAT on the purchase price of the yachts and where possible to avoid paying VAT on goods and services provided to the yachts," Blue Ocean Director Jonathan Holloway said in the memo, per the BBC.
The scheme allowed Abramovich to evade untold millions in taxes — the Cyprus government sought €14 million (almost $14.5 million) from Blue Ocean, per the BBC. This is still a tiny fraction of the Abramovich family's estimated $9.2 billion net worth.
Aside from this loss of tax revenue, one of the biggest issues with luxury yachts and private jets is their enormous environmental impact. Abramovich's yachts alone emit more carbon than some small countries, as The Guardian observed.
The 300 largest yachts emit over 300,000 tons of carbon annually, according to data cited by The New York Times. For context, Our World in Data used the 2024 Global Carbon Budget's figures to point out that the average person in the United States is responsible for about 14 tons. The global average is much lower.
The impact of luxury forms of travel accounts for a grossly disproportionate rate of global pollution. A study by Oxfam, Carbon Inequality Kills, examined the environmental impact of the ultra-rich. Per the report, the world's top 10% account for half of all carbon emissions, and the wealthiest have a much more disproportionate impact still.
"If everyone used private jets and superyachts like 50 of the world's richest billionaires, the remaining carbon budget to stay within 1.5C would be burned up in just two days," Oxfam stated.
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Definitely 👍 The carbon budget is the total amount of carbon dioxide emissions permitted to comply with the terms of the Paris Agreement on controlling the rising global temperature to 1.5 degrees Celsius above pre-industrial levels.
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