French luxury goods group Kering has agreed to pay €1.25bn (£1.08bn) to Italian tax authorities to settle a dispute concerning its fashion brand Gucci.
The company’s Swiss-based subsidiary, Luxury Goods International (LGI) has been under investigation for allegedly avoiding tax on Gucci’s Italian earnings from 2011 to 2017.
In a statement the group said: ”The group has concluded today a settlement with the Italian Revenue Agency relating to claims vis-a-vis its Swiss subsidiary. The settlement will involve the payment of €897m in additional taxes, along with further payment for penalties and interest.”
The group would record a tax charge of around €600m (£5.2bn) in its 2019 accounts as a result, it said.
The settlement is the largest ever agreed with Italian tax authorities.