Luxury Group Kering Probed for Tax Fraud: French Prosecutor -- Barron's
FROM AFP NEWS
AFP - Agence France Presse December 16, 2020
Luxury group Kering, which owns Yves Saint Laurent among other
top brands, has been under investigation since February 2019 for
tax fraud, the French financial prosecutor's office said
It confirmed a report by the Mediapart news agency, which said
Kering had set up a system which enabled it to declare in
Switzerland activities in third countries, primarily Italy,
allowing it to avoid paying 2.5 billion euros ($3.0 billion) in
taxes between 2010 and 2017.
A Kering statement said the group firmly contested the
"unfounded allegations" of tax fraud contained in the Mediapart
Kering, which is headed by French businessman Francois-Henri
Pinault, said it was prepared to fully cooperate with the financial
In 2019, Kering, which also owns Balenciaga and Gucci, was hit
with a record tax bill in Italy of 1.25 billion euros in connection
with Gucci's earnings, following an investigation by the Milan
prosecutor that began in late 2017.
The Italian probe determined that Kering has used a logistics
centre in Lugano, Switzerland run by Kering's Luxury Goods
International (LGI) division to bill for activities that in fact
took place in Italy, thus reducing its tax bill there.
Mediapart, which first revealed the operation in March 2018,
said Kering then extended the system "to its other luxury brands,
with the exception of jewellery, including the French companies
Balenciaga and Yves Saint Laurent."
"Thanks to a secret tax agreement with the (Swiss) canton of
Tessin, Kering paid tax of just 8.0 percent on LGI's profits,
instead of 33 percent in France," Mediapart said.
It calculated that Kering avoided paying 180 million euros on
sales by Yves Saint Laurent alone.
The Barron's news department was not involved in the creation of
the content above. This story was produced by AFP. For more
information go to AFP.com.
© Agence France-Presse
(END) Dow Jones Newswires
December 16, 2020 10:06 ET (15:06 GMT)
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