Photo: Carolyn Contino/BEImages/Rex USA.
Prada's fall '14 menswear show takes place today in Milan, but it's the company's internal business practices that are making headlines this weekend. Surely not quite the way Italy's premiere luxury brand hoped to kick off 2014.
According to reports, Miuccia Prada has avoided paying around $658 million in taxes to Italian authorities over the years. The 64-year-old designer allegedly moved the seat of her multibillion dollar label — which she inherited from her grandfather, Mario — to the Netherlands and Luxembourg, both countries with more friendly corporate tax rates than Italy. At the end of last month, Prada apparently agreed to move its seat back to Italy and pay an undisclosed amount, estimated to be around $500 million, with CEO Patrizio Bertelli calling it a "strategic decision, consistent with our desire to invest on Italy."
The matter is currently being investigated by prosecutors, though a representative for Prada says the company is "not aware" of any such investigation. In an email statement to Bloomberg News, Prada lawyers Stefano Simontacchi and Guido Alleva added: "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." So, as a result of last month's arrangement, Prada may be off the hook.
This is just the latest scandal in a series of high-profile tax evasion investigations by the Italian government. Last year, designers Dolce & Gabbana were sentenced to prison for a year and eight months for tax evasion. That particular drama ended rather fruitlessly, as both men blithely ignored the ruling, made an appeal, and continue to maintain their innocence. (Forbes)