MILAN — Italian eyewear giant Luxottica on Thursday confirmed a tax audit over some of its accounting practices, but insisted it follows universally accepted practices.
The audit concerns alleged irregularities in the use of a practice called transfer pricing, which is understood to be the price at which divisions of a company transact with each other. Transactions may include the trade of supplies or labor between departments.
Luxottica said it “has been consistently adopting and applying a fair and correct transfer pricing policy, totally compliant with the law and the most updated guidelines issued by the OECD [the Organization for Economic Co-operation and Development],” which the company described as “the undisputed leading authority for transfer pricing.”
Luxottica, which in addition to house brands such as Ray-Ban and Oakley, produces eyewear collections for brands including Burberry, Chanel, Ralph Lauren and Versace, said “the challenge by the Italian Revenue Service specifically concern[s] the ordinary export of products by the Italian manufacturing company Luxottica Srl to its trading affiliates located in all the main markets.”
The company underscored that these “are routine commercial transactions, i.e. the sales of products within the corporate group of Luxottica. These are not extraordinary transactions, nor transactions involving low-tax jurisdictions or otherwise aimed at shifting income abroad.”
It is understood that the Guardia di Finanza, an Italian police force under the authority of the national minister of economy and finance, and the Italian Revenue Service have been looking at Luxottica’s accounts to determine whether the company has evaded declaring income in Italy. A source said the evasion would revolve around an unfaithful tax declaration of more than 2 million euros, or $2.6 million at current exchange.
Following a request from prosecutors, the police have been visiting Luxottica’s headquarters and offices in the Italian town of Agordo, near Belluno.
“The Italian company Luxottica Srl sells its products to affiliates generally resident in OECD member countries and in any case in high-tax jurisdictions, so no tax benefit was sought in these transactions: It is not even conceivable to argue the existence of a transfer pricing practice aimed at an abusive intent and subject to sanctions,” contended the company.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion