MILAN Dec 6 Fashion house Prada said
it would be demanding a 42 million euros ($55 million) refund
from Italian tax authorities on revenues it made at its
Netherlands-based holding company.
Prada said it would go to court to appeal a decision, made
earlier this year, by the tax office compelling it to declare in
Italy any income from 2010 and 2011 from its Netherlands-based
holding company Prada Far East BV.
The Hong Kong-listed company, which competes in the luxury
goods sector with Louis Vuitton and PPR's
Gucci, said it only agreed to pay the sum in October to avoid
further penalties from the tax body.
"We don't agree with the interpretation of the regulation
and we will challenge it," Prada Chief Financial Officer
Donatello Galli said in a conference call with analysts.
Milan-based Prada, which is 80 percent-owned by Dutch Prada
Holding BV, said the case was triggered by a misinterpretation
of new 2010 accounting rules.
"This is a problem that is affecting other companies in
Europe, such as in Britain and France," added Galli.
European governments are intensifying efforts to root out
tax avoidance costing them around 1 trillion euros ($1.3
trillion) every year.
High-profile tax avoidance cases have involved Internet
giant Google, coffee chain Starbucks and
Italian officials have stepped up tax surveillance and
collection efforts in recent months as part efforts by Mario
Monti's government to bring Italy's huge public debt down.
Prada said on Thursday it beat quarterly profit forecasts,
lifting hopes for holiday sales of its leather bags and
colourful dresses despite recession at home.