Italy: Anyone Driving High End Car Pulled Over & Investigated For Tax Evasion

Police fanned out across Milan in late January halting more than 350 vehicles, mostly luxury SUVs and Porsches.

At checkpoints, including one adjacent to the fashionable Corso Como, the police got the driver’s license and registration, which they passed on to the national tax agency. The tax authorities will use the data to check if the cars’ owners had declared enough income -- and of course paid the right amount of income taxes -- to justify their lifestyles.

It was at least the fifth raid targeting wealthy Italians since a Dec. 30 sweep at the posh Cortina d’Ampezzo ski resort, where 251 high-end cars were stopped, including Ferrari and Lamborghini supercars, Bloomberg Businessweek reports in its Feb. 13 issue. Rome, Portofino on the Italian Riviera and Florence have also been targeted.

“I’ve been stopped three times in the last few weeks by authorities because I’m driving a luxury SUV,” says Andrea, a Range Rover owner and entrepreneur in Italy’s wealthy northeast. “It seems like the McCarthy era in America. You’re guilty by suspicion.”

The 43-year-old, who declined to give his last name for fear of attracting the attention of Italy’s tax agency, now plans to sell the SUV he bought last May. He expects to get at most 40,000 euros ($52,400) for a car that cost him more than 100,000 euros. “Dealers are full of luxury cars. No one wants to buy them now,” the businessman said.

...“The ownership of a luxury car highlights a level of spending and a standard of living that are often not reconcilable with the income declared by the owner,” said Carmelo Piancaldini, a manager in the inspections unit of Agenzia delle Entrate, Italy’s tax authority. “If one is transparent with the tax agency and buys a luxury car, he doesn’t have to worry.”