Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Kering to Pay 187 Mln Euros to Settle Bottega Veneta Tax Dispute

Kering to Pay 187 Mln Euros to Settle Bottega Veneta Tax Dispute

Friday, 1 April, 2022 - 17:15
The logo of Kering is seen during the company's 2015 annual results presentation in Paris, France, February 19, 2016. (Reuters)

French luxury goods group Kering agreed to pay almost 187 million euros ($207 million) to settle a dispute with Italian tax authorities centered on its fashion brand Bottega Veneta, three sources with direct knowledge of the matter said on Friday.

Kering confirmed the outlines of the settlement, without giving the cost, saying it would have no impact on the group's results in 2022 or on its recurring tax rate in future years.

"In the spring of 2019, given the rapid changes in its business environment, its strong international growth and some uncertainties of Italian legislation, Bottega Veneta proactively made contact with the Italian Revenue Agency to discuss its tax position", Kering said in a statement adding this agreement was "the result of those discussions".

Earlier on Friday the Milan prosecutor referred in a press release to a tax investigation led by Milan tax police into a Swiss company, part of an international luxury goods group, which allegedly operated in Italy to produce and distribute an Italian brand, without specifically naming the company.

Revenue at the Italian leather goods house were booked through Kering's Swiss-based subsidiary Luxury Goods International and Italian prosecutors and tax authorities argued that the tax should therefore have been paid in Italy, not Switzerland, the sources said.

Luxury Goods International paid 186.8 million euros to settle the tax case, covering the fiscal years 2012 to 2019.

Separately, Milan prosecutors' criminal investigation for tax evasion is still ongoing, the sources said.

Three years ago, Kering reached an agreement with the Italian tax authorities, paying a record 1.25 billion euros to settle a similar dispute centered on its fashion brand Gucci.

Milan prosecutors in the past have probed US tech giants such as Apple, Amazon and Facebook over taxes, allowing Italy to net several billion euros in fines and tax payments.

In previous cases, once the agreement between the companies and the Italian tax agency was signed, prosecutors closed the criminal investigation with either a dismissal or a settlement.

Editor Picks