PARIS — Kering said Monday it is in talks with Italian tax authorities over a tax probe focused on its Alexander McQueen brand.
“Kering confirms that discussions are underway with Italian tax authorities regarding Alexander McQueen,” the French luxury group said in a statement, confirming a Reuters report.
“The company and the Kering group are confident about the correctness of their operating mode and are pursuing these discussions in a spirit of constructive dialogue,” it added.
Reuters quoted unnamed sources as saying that prosecutors in Florence have opened an investigation for omitted tax declarations after Italy’s financial police alleged that Alexander McQueen failed to declare between 60 million euros and 70 million euros in taxable income between 2016 and 2022.
In 2019, the conglomerate paid the Italian Revenue Agency a total sum of 1.25 billion euros to settle an investigation into its tax payments related to the sales in Italy of Gucci products between 2011 and 2017.
The investigations identified an alleged tax evasion of 1.4 billion euros. According to the Italian tax authorities, in distributing Gucci products in Italy through a directly operated Switzerland-based subsidiary named Luxury Goods International, Kering had intentionally avoided the payment of taxes in Italy.
In 2022, it settled another tax dispute, this time pertaining to Bottega Veneta, through the payment of 186.7 million euros to the Italian Revenue Agency.
Another hefty tax bill would come at a sensitive time for Kering, which has extended its arsenal of cost-cutting measures to counter an expected 50 percent drop in operating profit this year. Layoffs, store closures and contract renegotiations are all on the menu as the French luxury conglomerate seeks to right its ship after a tougher-than-expected third quarter.
Among the international companies that have settled with the Italian Revenue Agency, in 2016, Apple paid a sum of 318 million euros and the following year, Google paid a total of 306 million euros to regularize its fiscal position in the country. Other fashion companies that have settled with the Italian tax authorities over the years range from Prada to Bulgari.
