Bulgari Group will face a tax trial after all.
A judge at the preliminary-level hearing in Rome, Bernadette Nicotra, evaluated the state prosecutor’s charges and decided on Tuesday that the Italian jewelry firm is to stand trial beginning in the fall, possibly starting on Oct. 13. Brothers Paolo and Nicola Bulgari, former chief executive officer Francesco Trapani and 10 company executives have been indicted.
The charges refer to the 2006 to 2008 period, before LVMH Moët Hennessy Louis Vuitton’s acquisition of the Italian jeweler.
Bulgari settled its tax case with Italy’s internal revenue service last year, but a penal trial would run its course independently. In February 2014, while insisting it remained “certain of being in the right,” Bulgari Group agreed to pay 42 million euros, or $57.2 million, to Italy’s tax agency. Bulgari and the agency settled on a payment of 28 million euros, or $38.1 million, but the addition of taxes, interest and other fines brought the total amount to 42 million euros.
The internal revenue service’s investigations were focused on alleged fraudulent earnings declarations and evasion of tax payments of around 3 billion euros, or $4.08 billion, starting from 2006, through a system of allegedly fictitious companies in the Netherlands and Ireland, set up in order to avoid paying taxes in Italy, where the tax rate is higher.
Bulgari, which is being defended by Paola Severino, a former Minister of Justice under the Mario Monti government, reiterated Tuesday that “the foreign companies were effectively operative,” and had more than 300 employees. Last year, Bulgari said that because of “substantial documentation,” the revenue office “has recognized the actual existence and real operations of the companies outside Italy and has declared three of the four notifications that followed the fiscal inquiry entirely unfounded.”
The Bulgaris are the latest in a long line of Italian fashion industry figures — ranging from Giorgio Armani to Valentino Garavani and Giancarlo Giammetti — to be targeted by the country’s tax police. Most recently, Domenico Dolce and Stefano Gabbana were cleared at Italy’s highest court last year, while Matteo Marzotto’s trial is ongoing.