ROME -- Ryanair has been placed under investigation in Bergamo over alleged tax evasion, judicial sources say.

Bergamo prosecutor Maria Mocciare claims that 220 employees of the low-cost airline have been paying tax in Ireland where the rate is lower, despite working and living in Italy. The total loss to Italy could total 12 million euros, reported the Corriere della Sera.

Michael O’Leary, chief executive of the Irish airline, and Juliusz Komorek, its legal affairs director, are being investigated. Ryanair has maintained the claim that it does not need to pay tax in Italy as the employees work on board Irish aircraft and not on Italian soil.

The 220 employees concerned signed their contracts in Dublin where social security contributions represent 12% of wages as opposed to 37% in Italy, despite being based at the Bergamo airport of Orio al Serio. Living within one hour’s drive of the airport is in fact a condition of employment.

Ryanair’s only comment was as follows: “Ryanair does not comment on rumour or speculation and will continue to observe EU tax laws.”