30 September 2014
Prada executives are being investigated for tax evasion by the Italian authorities.
The luxury goods company’s chief executive officers Miuccia Prada Bianchi and Patrizio Bertelli are being investigated by the Italian Judicial Authority regarding tax filings submitted by them in previous years.
In a statement made by Prada, it states that the investigation is a result of ‘a voluntary disclosure made by Ms. Miuccia Prada Bianchi and Mr. Patrizio Bertelli which resulted, in December 2013, in an agreement between them and the Italian Tax Authority. This agreement completely satisfied the claims of the Italian Tax Authority, as declared and confirmed by the Authority itself.’
The statement adds that Prada confirms that ‘neither [Prada] nor any of its subsidiaries was or is involved in this matter’.
However, while confirming an investigation now, Prada had in fact released a statement at the beginning of this year, in January 2014, clarifying that it was not aware of an investigation into the company or its subsidiaries.
In December 2013, Prada announced that it had shifted its controlling shareholder company Prada Holding and its subsidiaries, which had been located in The Netherlands or Luxembourg, to Italy following an investigation by the Italian Tax Authority.
The outcome of the previous investigation by the Italian Authorities resulted in not only Prada shifting some of its operations base from other low-tax regions to Italy, but also a tax agreement between the luxury goods company and the Italian Tax Authority.
As part of the agreement, Prada acquiesced to paying back any tax the Italian government lost out on in the past ten years as a result of the company’s operations being based in The Netherlands and Luxembourg.
Prada stated in its announcement at the time that ‘the liability to pay this amount has been borne by Prada Holding and the arrangement does not have any financial impact on the Company or the other members of the Prada Group’.This is not the first time the Italian Authorities have investigated tax evasion and within the luxury goods sector. Last year, Domenico Dolce and Stefano Gabbana, designers of luxury goods company Dolce & Gabbana, were sentenced to 18 months jail time in an Italian prison for being found guilty of tax evasion.