image: Gucci

image: Gucci

Gucci’s parent company is not out of the woods in the ongoing tax evasion investigation by Italian authorities. Following claims that Gucci’s Milan and Florence offices were raided by Italian tax police in December in connection with an investigation by Milan financial authorities as a result of suspected tax evasion in connection with 1.3 billion euros ($1.5 billion) in unpaid taxes beginning in 2010, it was revealed that Gucci failed to pay a reported 2.5 billion euros ($3.1 billion) in taxes in Italy and France. 

As of this week, Kering’s chairman Francois-Henri Pinault told shareholders that the company is “totally compliant with fiscal regulations in every country in which we operate,” adding that Gucci has not been notified of the sums under scrutiny.

The group’s latest comment comes on the heels of a statement previously released by Kering, saying, “The group pays its due taxes in Switzerland, in compliance with the law and the fiscal status of the company. This business operating model is known by French and other competent tax authorities.”

According to French publication Mediapart and Germany’s Der Spiegel, Gucci failed to play 2.5 billion euros ($3.1 billion) in taxes in Italy and France “by attributing wholesale revenues from brands including Gucci and Yves Saint Laurent to its LGI logistics center in Cadempino, Switzerland, thereby benefiting from a lower local tax rate.”

Mediapart reported early this year that Gucci relovated about 20 employees from its French or Italian offices to Switzerland “as part of the tax optimization scheme, but alleged that some of them continued to effectively work in Italy.” All the while, the paper asserts that Kering – the Paris-based conglomerate that owns Gucci, YSL, Balenciaga, Bottega Veneta, and Stella McCartney, among other brands – “operates subsidiaries in the Netherlands and Luxembourg as shell companies to benefit from tax breaks.” Kering has denied these allegations.