The International Consortium of Investigative Journalists has caused a storm of publicity this week by revealing details of offshore tax havens used by the wealthy. One section of the massive, interactive site established to publish the material dwells on the holdings of Carmen Thyssen-Bornemisza:
Documents obtained by the International Consortium of Investigative Journalists show how Thyssen-Bornemisza built up part of her collection buying art from international auction houses such as Sotheby’s and Christie’s through a Cook Islands company. The offshore service provider now called Portcullis TrustNet helped with the arrangements under a secretive structure that connected people in as many as six different countries.
Thyssen-Bornemisza, 69, didn’t reply to ICIJ’s questions directly, but allowed her attorney, Jaime Rotondo, to discuss her art and her offshore companies.
Rotondo acknowledged that Thyssen-Bornemisza gains tax benefits by holding ownership of her art offshore, but he stressed that she uses tax havens primarily because they give her “maximum flexibility” when she moves paintings from country to country.
“It’s convenient,” he said. “You have more freedom to move the assets, not just buying or selling, but also circulation.”
Offshore ownership helps prevent works of art from getting tied up by laws in various countries that can make it “a nightmare” to transfer them across national borders, he said.
Thyssen-Bornemisza isn’t alone in using offshore havens to manage her vast art collection. Many of the multi-millionaires and billionaires who count themselves among the world’s biggest art collectors use tax havens to buy and sell art, experts told ICIJ. […]
Thyssen-Bornemisza’s attorney said she paid sales taxes for her paintings in the countries where she bought them, but she doesn’t pay annual wealth taxes on them in Spain or Switzerland, where she holds a passport.
Rotondo said a loophole in Spanish law allows her to live in Spain most of the year, but not declare her wealth or pay taxes. She declares her assets in Switzerland, he said, but she doesn’t have to pay taxes there on her art because assets held in trusts are exempt from taxation under Swiss law.
Had the paintings been owned directly under her name, instead of through offshore entities, she may have been required to pay millions of dollars a year in taxes, ICIJ’s research indicates.