Italy's tax agency is expanding its investigation into Gucci's tax payments from 2011 to 2017, focusing on executive pay, Bloomberg News reported Sept. 24, citing documents and people familiar with the matter.
In May, Gucci parent Kering SA paid €1.25 billion to the Italian Revenue Agency to settle a tax dispute that stemmed from the failure of Luxury Goods International, Kering's Swiss subsidiary, to pay taxes in Italy for business in the country during the six-year period.
Following the settlement, authorities shifted the focus of their probe to individual managers' pay, Bloomberg said.
In August, tax officials reportedly notified current and former Gucci executives that they were being investigated over salaries paid to them from companies in Switzerland for work done for Gucci in Milan.
Executives involved in the probe could owe "tens of millions of euros" in back taxes, Bloomberg said, citing sources. One source said the Swiss unit and Castera, a shell company in Luxembourg, paid more than €80 million in salaries that may have been subject to Italian taxes.
CEO Marco Bizzarri is not included in the probe, according to the news outlet's sources, after he settled a dispute over his taxes in 2017 under an amnesty program for repatriating earnings.
Former CEO Patrizio di Marco was also part of the previous investigation in 2017, but unlike Bizzarri, di Marco has not settled, according to the report.
Kering told Bloomberg that "[t]here is nothing new in these allegations and there is nothing further to comment on."
"Kering concluded a settlement with the Italian revenue agency that was announced on May 9, 2019," the company reportedly said.
Bizzarri declined to comment, while di Marco did not respond to a written request for comment, Bloomberg said.
