Concluded a settlement with the Italian Revenue Agency relating to claims vis-a-vis its Swiss subsidiary Luxury Goods International S.A for a total of €1.25B
Announces that the Group has concluded today a settlement with the Italian Revenue Agency relating to claims vis-a-vis its Swiss subsidiary Luxury Goods International S.A. (LGI). The settlement, concluded after in-depth analysis and with a collaborative spirit, acknowledged that the claims raised during the tax audit regard both the existence of a permanent establishment in Italy in the period 2011-2017 with the associated profits, and the transfer prices applied by LGI in the same period with its related party Guccio Gucci S.p.A..
The settlement will involve the payment of €897 million in additional taxes, along with further payment for penalties and interest. The total required payment amounts to €1.25 billion.
Based on an initial estimate, this agreement should impact Kering’s consolidated financial statements in 2019 with an additional tax charge of around €600 million in the income statement and an outflow of €1,250 million in the cash flow statement.