Ryanair chief executive Michael O’Leary and another of the airline’s directors are expected to be charged with tax evasion in Italy.
Reports in today’s newspapers revealed that state prosecutors in the northern Italian city of Bergamo, where Ryanair operates out of Orio al Serio airport, have been investigating the airline for allegedly dodging around €12m (£9.6m) in social security payments since June 2010.
State prosecutor Maria Mocciaro reportedly told the Irish Times that she expected to bring formal charges against O’Leary and Ryanair’s legal adviser Juliusz Komorek "very shortly".
Prosecutors claim that Ryanair has been treating 220 staff recruited in Bergamo as Irish employees in order to pay a lower rate of social security contributions. In Ireland, the rate is only 12% compared with 37% in Italy.
Ryanair has refused to comment on the specific case, saying that it does not respond to "rumours and speculation" but it said it would "continue to observe EU tax laws".
Despite the fact many of the 220 employees live in Italy, the airline is expected to argue that they can be treated as Irish as they work on Irish-registered aircraft.
New EU rules approved earlier this year state that pilots, stewards and hostesses will pay taxes where their "home base" is, or where they start and finish their service. However carriers will have 10 years to comply with these new rules.
Ryanair flew more than 22 million passengers to and from 21 Italian airports last year, second only to the flag carrier Alitalia, which flew nearly 26 million passengers.
