Most Recent Articles In Designer and Luxury
Latest Designer and Luxury Articles
- Pantone’s Top 10 Colors for Fall 2016
- Alice + Olivia’s Consumer Outreach
- Millennials Seen as New Luxury Targets
More Articles By
MILAN — News of Miuccia Prada and her husband Patrizio Bertelli being investigated for unfaithful earnings declaration by Italy’s tax authorities was refuted by their lawyers on Friday.
This story first appeared in the January 13, 2014 issue of WWD. Subscribe Today.
“At the moment, as far as we know, nobody is under investigation,” said Stefano Simontacchi, together with Guido Alleva, who consulted with the fashion designer and Bertelli, chief executive officer of Prada Group, on a voluntary disclosure made to the Italian tax office last year.
A well-placed legal source told WWD that Bertelli and Prada last year paid 470 million euros, or $643.9 million at current exchange, to the tax office. “It’s an enormous sum, Prada and Bertelli themselves advised on the existing tax anomalies, brought back the [legal headquarters of the] company to Italy and paid the backed-up taxes,” said the source. “A first relation from the Agenzia delle Entrate [Italy’s internal revenue service] arrived to the prosecutors but there is no precise information on who is being investigated, and prosecutors are taking their first steps in analyzing the papers.” The source said neither Bertelli nor Prada, nor anyone else at the group, has received any communication of investigation.
Simontacchi and Alleva said that, since the amount referring to the voluntary disclosure paid to the Agenzia delle Entrate “exceeded the limit that is penally relevant,” the state’s prosecutor’s office was automatically notified “as foreseen by the law referring to omitted or unfaithful (tax) declaration.”
A legal source said any transaction with Italy’s tax office starting from a sum as low as 100,000 euros, or $137,000, is declared to the prosecutors. Incidentally, one of two prosecutors involved in looking at the Prada paperwork is Gaetano Ruta, who has also been working on the Dolce & Gabbana and Matteo Marzotto tax cases.
Prada and Bertelli’s lawyers said that, “in any case, the new regulations concerning voluntary disclosure that are expected to be ratified should be applicable to this case, with a consequent de-penalization.”
The Italian government is aiming at passing a law that will promote voluntary disclosures. Even if anyone were to be investigated, this could bring a financial fine and not any penal consequence, said the Prada lawyers.
The legal source said many issues remain unresolved by “the impact of this law that has not passed yet.”
According to a source, the Agenzia delle Entrate had contested that Prada Holding BV had allegedly set up subsidiaries in the Netherlands and Luxembourg for a more favorable tax rate and only formally, but that they were not really operative out of that country. In December, Prada announced “the completion of a voluntary disclosure procedure, which follows the company’s strategic decision to choose Italy as its business hub.”
This, said the company at the time, followed “a collaboration program with the Italian Tax Authorities that started back in 2008, whereby the Group’s Italian subsidiary, which is not involved in the procedure, applied for several international rulings.”
Collaborating with the Italian tax authorities allowed for the group to determine all tax obligations following the repatriation of non-Italian companies, based on the last 10 years.
“As a result of this procedure — which will hopefully set a relevant precedent in the enforcement of voluntary disclosure rules currently under discussion — after repatriation, the corporate structure will be further rationalized, i.e., only the holding companies required to suitably perform corporate governance will remain,” said the company at the time.