Megayacht 'Topaz' in Palma. archive photo. | Gabriel Alomar


A billionaire who owns Manchester City and several other football clubs has been fined 147,000 euros for not paying VAT on the diesel for his megayacht.

The 147 metre long ‘Topaz’ is one of the most luxurious yachts in the world and is owned by Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister of the United Arab Emirates, Minister of Presidential Affairs and a member of the royal family in Abu Dhabi.

In 2013, the ’Topaz’ sailed to Palma via Andalusia, Barcelona and refuelled along the way. The captain argued that they were sailing for commercial purposes in order to take advantage of the tax exemption for merchant ships and fishing vessels, which does not apply to recreational boats.

The attempted fraud was discovered by Palma Customs who filed a complaint and ordered Oceanus Maritime Limited, which is based in the Isle of Man and owned by Sheikh Mansour, to pay the VAT.

Sheikh Mansour then filed an appeal arguing that part of the trip was a trade mission to export goods to New York and Egypt, but the appeal was thrown out by the court which said the main activity of the ‘Topaz’ is to be a pleasure boat.

"The exemption will not apply to ships intended for sport, leisure or private use,” said the judge.

Defence lawyers then claimed a conflict of jurisdiction because the vessel had refuelled in Andalusia and Barcelona, but not in the Balearic Islands. That was also dismissed by the judge who pointed out that VAT is a state tax, therefore people can be prosecuted without distinction of Autonomous Community.

The Defence also argued that they shouldn’t have to pay the tax because the company is based outside the European Union and there are no employees of Sheik Mansour in Spain, but that was also rejected.

"That there is no representative in Spanish territory cannot prevent the administrative reaction in a case like this," said the judge.

However the fact that there are no employees of Sheikh Mansour in Spain does prevent him from offsetting the VAT with other invoices incurred, so he will eventually have to pay the taxes in Spain.