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Kering says its Swiss activities tax-compliant

Kering, a French luxury goods group has fulfilled its tax obligations in Switzerland. It stated that the company used a Swiss-based scheme to evade taxes on earnings from brands such as Gucci and Yves Saint Laurent. Kering had saved on taxes it should have paid in countries such as Italy by billing some business carried out elsewhere to a Swiss site as per France's Mediapart and Germany's Der Spiegel.

Mediapart, which cited documents linked to an Italian tax investigation, says that it estimated that since 2002 Kering had saved 2.5 billion euros (2.20 billion pounds) in tax in this manner. Kering says all its companies there carried out tangible business activities its Swiss businesses, home to more than 600 employees, were an important part of its inventory management, billing and supply chain logistics and that their activities were directly linked to its brands. 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, says Kering in a statement.

The bulk of the allegations are centred on Italian fashion brand Gucci, which is subject to a tax investigation by prosecutors in Milan. Police raided Gucci offices in Milan and Florence late last year. The group run by French billionaire Francois-Henri Pinault, scion of Kering's founding family, stated it had yet to set aside funds linked to the investigation. No specific provision was recorded in 2017 as the related tax risk cannot be measured reliably at this point in the proceedings.

 
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