French luxury goods group Kering said on Thursday it had agreed to a 1.25 billion euro ($1.40 billion) settlement to draw a line under a dispute with Italian tax authorities centred on its fashion brand Gucci. The company's Swiss-based Luxury Goods International (LGI) subsidiary has been under investigation for allegedly avoiding tax on earnings generated by Gucci in Italy.
"The group has concluded today a settlement with the Italian Revenue Agency relating to claims vis-a-vis its Swiss subsidiary," Kering said in a statement. "The settlement will involve the payment of 897 million euros in additional taxes, along with further payment for penalties and interest." Kering would record a tax charge of around 600 million euros in its 2019 accounts as a result, the company said. The settlement is the largest ever agreed by a company with the Italian tax authorities. ($1 = 0.8906 euros)
(With inputs from agencies.)