World Footwear

Companies

Kering: Italy tax settlement is closed

May 10, 2019 Italy
Kering: Italy tax settlement is closed
The French-based luxury group announced that it has concluded a settlement with the Italian Revenue Agency relating to claims vis-a-vis its Swiss subsidiary Luxury Goods International S.A. (LGI)
The settlement, concluded after in-depth analysis and with a collaborative spirit, acknowledged that the claims raised during the tax audit regard both the existence of a permanent establishment in Italy in the period 2011-2017 with the associated profits, and the transfer prices applied by LGI in the same period with its related party Guccio Gucci S.p.A..

The settlement will involve the payment of 897 million euros in additional taxes, along with further payment for penalties and interest. The total required payment amounts to 1.25 billion euros.

Based on an initial estimate, this agreement should impact Kering’s consolidated financial statements in 2019 with an additional tax charge of around 600 million euros in the income statement and an outflow of 1 250 million euros in the cash flow statement.

The litigation between Italian Revenue and the French giant started when the Italian Finance Police charged the French group with an alleged tax fraud: roughly 1.4 billion euros, coming from eluded revenues, 14.5 billion euros, from 2011 till 2017. At that time, Luxury Goods International (LGI), a Swiss subsidiary, was in charge of Gucci products marketing and sale and the charge was based on the fact that lower taxes were paid in Switzerland for commercial and business activities actually carried out in Italy.

Photo by Álvaro Serrano on Unsplash

Related Events

  • Jan
    11
    Jan 11-Jan 14, 2025 | Riva del Garda, Italy

    Expo Riva Schuh

  • Jan
    14
    Jan 14-Jan 17, 2025 | Florence, Italy

    Pitti Uomo

  • Feb
    23
    Feb 23-Feb 25, 2025 | Milan, Italy

    Mipel

  • Feb
    23
    Feb 23-Feb 25, 2025 | Milan, Italy

    MICAM Milano

Related Organizations

  • ASSOMAC - National Association of Italian Manufacturers of Footwear, Leathergoods and Tanning Technologies

    ASSOMAC - National Association of Italian Manufacturers of Footwear, Leathergoods and Tanning Technologies

    Italy
  • POLI.Design-  Milan Polytechnic

    POLI.Design- Milan Polytechnic

    Italy
  • Rossimoda Footwear Museum

    Rossimoda Footwear Museum

    Italy
  • UNPAC - Italian Leather Chemicals Manufacturers Association

    UNPAC - Italian Leather Chemicals Manufacturers Association

    Italy