Karl Lagerfeld Under Fire for Tax Evasion Claims

Karl Lagerfeld is the newest fashion industry figure to come under suspicion of tax evasion, according to French publication L’Categorical and WWD, the latter of which has already pulled (and then republished) its story since publication this afternoon (Note: the Paris-based design house is a regular WWD advertiser). L’Categorical alleges that Lagerfeld, who serves as creative director for both Chanel and Fendi, failed to pay taxes on over 20 million euros (or roughly $ 21.5 million) in earnings over the previous six years by thanks to the help of corporations situated in Eire, the British Virgin Islands and the U.S. French authorities have reportedly initiated an investigation of the industry figurehead. 

According to the Associated Press, the recently-launched investigation is focusing on the 7L bookshop in Paris, which Lagerfeld founded in 1999. According to L'Express, “the bookstore houses a photo studio owned by a British-based company, which takes in the revenue from Lagerfeld's photography work. The bookstore loses money and thus does not pay taxes.” The news weekly said French tax authorities suspect the foreign transactions allowed the "concealing of the undeclared professional activity" of Lagerfeld as a photographer. French authorities are also interested in the activities of two property investment companies and a tax adjustment Lagerfeld received in the 1990’s.

The investigation comes several years after Lagerfeld accused President Francois Hollande of destroying France's economy by imposing painful taxes on the rich, calling the Socialist leader an "idiot.” Speaking in an interview with the Spanish version of Marie Claire in 2012, Lagerfeld said of Hollande: "This idiot will be as disastrous as [former Spanish Prime Minister] Zapatero was.” The charges against Lagerfeld come on the heels of an array of tax evasion claims throughout the fashion industry. Prada, Dolce & Gabbana, Bulgari, Valentino, Giorgio Armani, Net-a-Porter, and model Bar Refaeli have been all been accused and/or tried on similar grounds in the recent past.

Per L’Categorical, French authorities declined to comment on its investigation, citing “tax secrecy.” Lagerfeld similarly declined to remark.