Gucci likely to go to trial for tax evasion

Do not mess with Italy's tax authorities. Sometimes fashion brands are reminded of this the hard way. Business of Fashion has reported that Milan's prosecutors have wrapped up their probe into alleged tax evasion of around 1 billion euros by Gucci setting the stage for a formal request for trial.

In the next 20 days the case will be sent to court unless the parties agree on a settlement or new evidence emerges. It is suspected that Gucci may have paid taxes on profits generated by sales in Italy in another country with a more favorable tax regime. Prosecutors allege that Gucci owes 1 billion euros for revenues generated between 2010 and 2016.

According to Business of Fashion, the prosecutors allege Gucci revenues booked through Luxury Goods International (LGI), the Swiss company that manages the distribution and logistics platform for most of Gucci parent company Kering's luxury brands, should be taxed in Italy and not in Switzerland.

Gucci's CEO Marco Bizzari and former CEO Patrizio Di Marco are also under investigation.

In a statement Kering said it was, "confident about the correctness and transparency of its operating mode, and is cooperating actively with the competent authorities."

Photo: Gucci.com