You will be redirected back to your article in seconds
Skip to main content

Gucci Tax Probe Wraps with Possibility of Trial and Billions in Fines

Prosecutors in Milan have finalized a probe into Gucci’s tax payments, which could possibly lead to a trial if a settlement cannot be reached. The luxury fashion house may have alleged tax debt of more than $1 billion, according to an unnamed judicial source cited by Reuters.

In December of 2017, Italian tax police visited the offices of Gucci’s Milan and Florence headquarters based on suspected tax evasion. Another anonymous Reuters source reported that, at the time, police suspected Gucci may have reported revenue earned in Italy in other countries with more favorable tax codes.

At the time, Gucci said it was working in full cooperation with Italian authorities and that it was “confident about the correctness and transparency of its operations,” according to Reuters.

In January, Gucci’s CEO Marco Bizzarri, was also implicated in the alleged tax scheme by French newspaper, Mediapart. The paper claimed to have access to internal emails and documents that implicated both Bizzarri and Gucci’s parent company, Kering, in the scheme. It said that both had saved millions in tax payments over a seven-year period by funneling money through a firm in Luxembourg. Former Gucci CEO Patrizio Di Marco was also named in the investigation.

At that point, Kering took over press relations for Gucci and Bizzarri, and said it had complied completely with tax regulations “at all levels” and added that the Gucci boss was also fully compliant with tax regulations in Italy.

Since the initial probe, prosecutors have alleged that the luxury brand may have also used a Swiss company known as Luxury Goods International, a distribution and logistics company with firm ties to Kering and its other luxury brands, to claim Italian profits through the Swiss tax code.

On Wednesday, Reuters said a source close to the case believes the prosecution has wrapped up its investigation. Both parties now have the next 20 days to agree on settlement terms if they want to avoid a new trial. If new evidence emerges, that deadline could be extended.

Kering responded to the closing of the investigation in an email sent to Reuters, saying it is “confident about the correctness and transparency of its operating mode, and is cooperating actively with competent authorities.”