Prada Said to Be Under Investigation for Tax Evasion

Prada Spring/Summer 2014 runway | Source: NowFashion

MILAN, Italy — Prada is being investigated by Italian prosecutors for possible tax evasion after the luxury- goods company disclosed undeclared taxable income, a person with knowledge of the probe said.

The investigation by Milan prosecutors started a few days ago after they were notified by the country’s tax agency about a settlement it reached with the company, said the person, asking not to be identified because the probe isn’t public.

Prada Holding agreed to relocate companies in the Netherlands and Luxembourg to Italy and pay backdated tax after negotiations with Italian fiscal authorities, Prada SpA said on Dec. 20. Prada SpA Chief Financial Officer Donatello Galli also said that day on a call to analysts that the company had a different interpretation of tax rates on its foreign holdings and there was no litigation.

Prada SpA Chairman Miuccia Prada, Chief Executive Officer Patrizio Bertelli and accountant Marco Salomoni have been named in the probe, which is for possible undeclared or false tax claims, newspaper Corriere della Sera reported earlier today.

Lawyers for Milan-based Prada said the company wasn’t aware of a probe by Italian authorities and that documents regarding the allegations have been submitted to prosecutors. “As it stands we are not aware of there being an investigation,” Stefano Simontacchi and Guido Alleva said in an e-mailed statement.

“In any case, the new rules which are expected to enter into force regarding voluntary disclosure should be considered applicable to the present case, thereby leading to decriminalization,” the lawyers said.

By Andrew Roberts, Sonia Sirletti; Editors: Robert Valpuesta, Dan Liefgreen, Celeste Perri