Kering to pay £1.07bn tax to settle dispute

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Kering Gucci
// Kering has agreed to pay £1.07bn to Italian tax authorities 
// Tax authorities claimed Kering’s Swiss-based subsidiary, Luxury Goods International (LGI) failed to pay taxes from 2011 to 2017
// The amount is the largest settlement ever agreed by a company with the Italian tax authorities

Kering has agreed to paying a total of €1.25 billion (£1.07 billion) to Italian tax authorities to settle a dispute.

The tax authorities claimed that the Swiss-based subsidiary of the luxury retail company, Luxury Goods International (LGI), failed to pay taxes that were due in Italy from 2011 to 2017.

”The group has concluded today a settlement with the Italian Revenue Agency relating to claims vis-a-vis its Swiss subsidiary,” Kering said in a statement.

“The settlement will involve the payment of €897 million (£774 million) in additional taxes, along with further payment for penalties and interest.”

The parent company of luxury retailers like Gucci also said it would consequently record a tax charge of around €600 million (£5.2 billion) in its 2019 accounts.

Meanwhile, Kering recorded €13.7 billion (£11.8 billion) in sales last year, of which Gucci – its fast-growing brand – accounted for 60 per cent. 

The total required payment €1.25 billion (£1.07 billion), is the largest settlement ever agreed by a company with the Italian tax authorities.

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