Brazil Tax Agency Orders Auction of Falcon 2000

 - November 23, 2021, 9:34 AM
(Photo: Special Department of Federal Revenue of Brazil)

A Dassault Falcon 2000, one of nine business jets seized in 2012 on charges of evading import tax, goes to auction December 15 under order of Brazil’s Federal Revenue agency. The minimum bid of R$2.275 million (about $408,000) is less than half the sum that courts have ordered tax authorities to pay for hangarage fees and a far cry from its R$7.5 million value when seized.

Auction catalog photos show gleaming woodwork and a gold-plated lavatory sink, but also a return-to-service estimate of R$6.31 million, “almost 50 percent more than fair market value.” Highlighted cautions include that the logs are missing—logbook, engines, and airframe, among others—and that four tires are flat. The aircraft’s best value is as parts, said the appraiser, and once auctioned, it becomes legal in Brazil. A long series of qualifications and documents are needed to bid; for example, only a Brazilian corporation can resell the aircraft, in whole or in parts.

The tax charges were never clear-cut, turning on such issues as whether an aircraft is “used” only when it is flown or when it is merely parked, and on personal versus business use. Most of the seizures were successfully fought in court.  The Falcon lender, 1st Source Bank, said in a collection action against the owner that it had warned its Brazilian clients of the upcoming seizures.

The auction had been delayed by appeals by the lender and the owner. The auction site details how bids may be placed and viewing scheduled, now through December 14.