MILAN — Having settled their tax bill, Miuccia Prada and Patrizio Bertelli are cleaning up their corporate structure.
This story first appeared in the October 24, 2014 issue of WWD. Subscribe Today.
The designer and her husband settled with Italian tax authorities last year regarding unpaid taxes related to the location of their corporate headquarters in Luxembourg rather than in their home country. Prada SpA said at the time that it would transfer its legal headquarters to Italy.
On Wednesday, the company said Prada Holding BV, Prada SpA’s immediate holding company, is to be incorporated into Gipafin Sarl by December. After the merger, Prada Holding BV will cease to exist and Gipafin Sarl, the company’s new immediate holding company, will be renamed Prada Holding Sarl and its legal seat will be transferred from Luxembourg to Italy. The company said the reorganization is meant to “simplify the control structure of the company and will have no impact on the Prada Group.”
Prada Holding BV owns about 80 percent of the issued capital in the company, and Prada Holding BV is in turn wholly owned by Gipafin Sarl.
The new structure is the latest step in the streamlining of the group’s assets. As reported, a well-placed legal source last year told WWD that Prada and her husband Bertelli paid 470 million euros, or $643.9 million at current exchange, to the tax office. Prada and Bertelli made a voluntary disclosure to tax authorities in December, which resulted in an agreement between them and the Italian Tax Authority. They advised on the existing tax anomalies, and paid the backed-up taxes. “This agreement completely satisfied the claims of the Italian Tax Authority, as declared and confirmed by the authority itself,” said the company in September, when it was revealed that the designer and her husband were being investigated on “the accuracy of certain past tax filings” relating to foreign-owned companies. The investigations are expected to be completed by the end of the year.
As reported, the Agenzia delle Entrate had claimed that Prada Holding BV had set up subsidiaries in the Netherlands and Luxembourg to allegedly benefit from a more favorable tax rate, but that they were not really operative out of that country. In December, Prada revealed “the completion of a voluntary disclosure procedure, which follows the company’s strategic decision to choose Italy as its business hub.”
At the time, a well-placed legal source told WWD that the investigation is “a standard procedure” in light of the large sum involved, which was more than $600 million. Any transaction with Italy’s Agenzia delle Entrate, the country’s revenue service, starting from a sum as low as 100,000 euros, or $126,500, is automatically sent to the public prosecutor’s office.
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. The Italian luxury group is listed on the Hong Kong Stock Exchange.