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Kering agrees to 1.25 billion euro Italy tax settlement

Christian Fernsby ▼ | May 10, 2019
French luxury goods group Kering said it had agreed to pay 1.25 billion euros ($1.40 billion) to settle a dispute with Italian tax authorities centered on its fashion brand Gucci.
Europe   The settlement is the highest ever agreed
The settlement, first reported by Reuters last month, is the highest ever agreed by a company with Italian tax authorities.

Kering, which had denied avoiding tax, has a cash pile estimated by analysts at more than 10 billion euros, meaning it was equipped to absorb the cost.

The company said under the settlement it would face an additional tax charge of 600 million euros in its 2019 financial accounts.

"The settlement will involve the payment of 897 million euros in additional taxes, along with further payment for penalties and interest," Kering said, adding that the total came to 1.25 billion euros.

The allegations centred on Gucci, which Italian tax authorities accused of evading taxes on more than 1 billion euros in revenues over several years. Gucci offices in Milan and Florence were raided by Italian police in late 2017.