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

The logo of Kering is seen during the company's 2015 annual results presentation in Paris, France, February 19, 2016. (Reuters)
The logo of Kering is seen during the company's 2015 annual results presentation in Paris, France, February 19, 2016. (Reuters)
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Kering to Pay 187 Mln Euros to Settle Bottega Veneta Tax Dispute

The logo of Kering is seen during the company's 2015 annual results presentation in Paris, France, February 19, 2016. (Reuters)
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.

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Fashion

Jeweler's Eye-popping Watch is Love Letter to Albania

The timepiece, worth roughly $1.4 million, is set to face off against the best watches from across the world at the Geneva Watchmaking Grand Prix in November. ADNAN BECI / AFP
The timepiece, worth roughly $1.4 million, is set to face off against the best watches from across the world at the Geneva Watchmaking Grand Prix in November. ADNAN BECI / AFP
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Jeweler's Eye-popping Watch is Love Letter to Albania

The timepiece, worth roughly $1.4 million, is set to face off against the best watches from across the world at the Geneva Watchmaking Grand Prix in November. ADNAN BECI / AFP
The timepiece, worth roughly $1.4 million, is set to face off against the best watches from across the world at the Geneva Watchmaking Grand Prix in November. ADNAN BECI / AFP

Albanian jeweler Pirro Ruco labored day and night for five years to capture the essence of his country in a spectacular luxury watch.
Now the timepiece, worth roughly $1.4 million, is set to face off against the best watches from across the world at the Geneva Watchmaking Grand Prix in November, AFP said.
Set under a sapphire dome, the hours are marked by 12 golden folk dancers -- each in different regional dress -- set on Murano glass, the minute and hour hands adorned with eagle talons in homage to Albania's national symbol.
Ruco's rollercoaster rise mirrors that of Albania, from poverty and isolation as the most closed communist regime in Europe, to rollicking capitalism.
Along the way the jeweler overcame jealousy, the secret police and being sent into internal exile to rise to the pinnacle of his profession.
It all began for Pirro -- as he is known in his homeland -- in 1985 when he was asked to make a medal in red and gold bearing the head of Enver Hoxha, the paranoid dictator who ruled the small Balkan nation with an iron fist for more than four decades.
"That saved me," he told AFP from his workshop tucked away in an alley in the capital Tirana.
The medals were awarded to the regime's most loyal supporters and later caught the eye of Hoxha's wife.
The turn of fortune saw thousands more produced and worn by communist cadres across Albania.
"All the congressional delegates had to wear it. I made a name for myself with it," he said. It also saved him from the textile mills where he had been sent because his family had been deemed "rebellious".
'Priceless'
All this, however, was nearly derailed by an anonymous letter sent to authorities accusing Pirro of working with foreign agents.
He was questioned by intelligence agents and his workshop raided.
Down but not out, he was able to bounce back after crafting a ring bearing the image of the late husband of a member of the communist politburo and in July 1990 won a prize for a piece featuring Albania's 15th-century national hero Skanderberg.
But the very next day history intervened. The regime began to crumble and the collapse of Albania's communist rule in 1991 was followed by years of violent tumult as the country transitioned to a free-market economy.
Amid the ups and downs, Pirro stayed busy designing pieces for officials and celebrities.
During a trip to Basel in Switzerland in 2016, something new caught his eye.
"I wanted to make a watch. It was my new dream," he told AFP.
For the next five years, Pirro said he focused on "doing something special, Albanian, and at the same time completely new and never before seen in the watch industry."
The new timepiece which he calls Primordial Passion was designed in collaboration with the Swiss watchmaker Agenhor.
"I never wanted to make jewelry, but art," the jeweler said.
"Sculptures, images of the country, pieces of culture... This watch is the culmination of all that, of this love for Albania," he added.
"It is more than just a watch. It combines the rich heritage of ancient Albanian culture with the notion of chronometry."
Pirro refuses to divulge the methods used to craft the watch, but remains hopeful the painstaking details will be recognized by the judges at the Grand Prix in Geneva.
Several collectors have already contacted him about buying the timepiece, he said, though it would be difficult to part with his creation.
"I set a price because I had to. But for me, it is priceless."