Gucci's parent company avoided taxes of $ 1.6 billion, according to the report of the Milan Tax Authority – Fashion Law



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Kering is accused of failing to pay $ 1.6 billion in taxes in Italy between 2011 and 2017. The Paris conglomerate of luxury goods, which owns including Gucci, Saint Laurent, Balenciaga and Alexander McQueen, revealed Friday the audit unit of the Italian tax authorities has "completed a tax audit" as part of its investigation "concerning [Gucci’s] tax issues in Milan "and found that" Luxury Goods International, a Swiss subsidiary of Kering, conducted business activities in Italy that should have resulted in the payment of tax on Italian companies. "

The results of the audit – which Kering says are "challenging both amount and amount" – follow claims that the luxury giant was involved in a broad plan to avoid to pay taxes in Italy, and an effort in this direction would have displaced about 20 employees from its French or Italian offices in Switzerland "as part of the tax optimization plan, but claimed that some of them continued to work effectively in Italy ".

Meanwhile, the French publication Mediapart and the German magazine Der Spiegel announced last year that Kering "operates subsidiaries in the Netherlands and Luxembourg as front companies to benefit from" the lowering of local tax rates in these countries. country. Kering has denied the crime charges since the first information, late 2017, that Gucci, in particular, was under investigation as part of an investigation by the financial authorities of Milan and linked to an alleged tax evasion.

According to Reuters, Kering "said that LGI was a big, full-fledged company, with 600 employees in charge of inventory management, billing and supply chain logistics, with an economic model" known to the French tax authorities and others "."

The audit of the tax administration of Milan "will now be reviewed by the Revenue Agency unit to evaluate the conclusions of the report, which will then make its final decision," Kering said in a statement released to the public Friday.

Gucci is not the first Italian home to be criticized for tax claims, while Italian tax authorities have stepped up their gambling over the last few years in the context of a sovereign debt crisis in Europe that put pressure on public finances. The Guardia di Finanza – the Italian financial authority – has focused on the use of foreign European subsidiaries through which Italian companies, especially in the luxury sector, would have masked their profits.

As a result, a large number of Italian fashion figures have become the targets of the crackdown on Italian tax evasion during the last years. The founders of Dolce & Gabbana, Domenico Dolce and Stefano Gabbana, the general managers of Prada, Miuccia Prada and Patrizio Bertelli, Giorgio Armani, the Bulgari family, and the former president of Valentino, Matteo Marzotto, among others, have gone under the microscope of the Italian Tax Administration.

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