image: Gucci
Gucci made headlines in December after it was revealed that it is being probed as part of an investigation by Milan financial authorities as a result of suspected tax evasion. The Italian design house confirmed that Italian tax police visited its Milan and Florence offices in connection with Gucci potentially paying “taxes on profits generated by sales in Italy in another country with a more favorable tax regime.” The company is said to have boasted 1.3 billion euros ($1.5 billion) in unpaid taxes beginning in 2010.
As of late this week, Gucci’s parent company Kering asserted that Gucci chief executive Marco Bizzarri was fully compliant with his tax obligations in Italy. Bizzarri, along with his employer, was said to have benefited from an offshore tax scheme. In addition to the brand, itself, Bizzarri and his predecessor Patrizio Di Marco are both under investigation, as well.
According to Reuters, Mediapart – a French online investigative and opinion journal – has reported that Kering and Bizzarri saved millions of euros in tax and welfare bills over a seven-year period by channeling pay checks through a firm in Luxembourg. As WWD reported in December, “The money in question involves revenues from activities that were registered in Switzerland, but which would have been linked to the work of managers formally based in [Switzerland], where companies tend to be subjected to a more favorable tax regimen than in Italy, but actually working in Milan.”
Kering has since issued a statement saying that it “has implemented a governance that aspires to ensure full compliance with tax regulations at all levels, including its employees. In regards to Mr. Bizzarri, he is fully compliant with his tax obligations in Italy, where he is tax resident.”
The status of the probe in regards to Gucci as a whole, as distinct from Bizzarri, is currently unclear.
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