ARMANI SETTLES WITH ITALIAN TAX AUTHORITIES

Giorgio Armani Spring 2014 RTW - Image source: Vogue 

Italian newspaper Il Sole 24 Ore reported Friday that Fashion house Giorgio Armani has settled with Italian tax authorities for 270 million euros ($374 million.) The settlement comes after a dispute over payments from the group's subsidiaries abroad. 

Italy has become interventionist on taxes during its longest recession since the second world war. Companies in high-profile sectors, such as luxury goods, are becoming a target. For example, Armani's industry peer Prada Holding, which controls Prada, also coughed up a heft sum to the tune of 420 million euros to settle taxes in Italy. Prada's settlement came after its completion of a process of voluntary disclosure in December. Last year designers Domenico Dolce and Stefano Gabbana, the duo behind Dolce & Gabbana,  were convicted of concealing millions of euros in taxes. The pair have appealed their 20-month jail sentence and the verdict is expected April 30th. 

Italy's central bank estimates that the country could secure 200 billion euros in unreported taxes. With the country's 2 trillion euro national debt looming, Italian tax authorities have taken an aggressive stance. New disclosure guidelines have been established to encourage Italian businesses to repatriate from tax havens in the Netherlands, Switzerland, and Luxembourg where family-owned firms have based assets in order to shelter them from Italy's tax system. Several luxury brand owners have started complying with the new guidelines, including Diego Della Valle, entrepreneur behind luxury leather firm, Tod's. 

source: Reuters