Leonardo Del Vecchio, chairman of Luxottica, has been found guilty of tax avoidance by a court in Belluno, the capital of eyewear manufacturing in Italy. He is accused of having established a company in Germany for the sole purpose of avoiding the payment of capital gains taxes and taxes on dividends. If the Belluno court’s decision is confirmed, Del Vecchio will be required to pay the Italian government €20.4 million in unpaid taxes and fines relating to the years 1997 and 1998, plus €5,000 in legal expenses.
Del Vecchio is claimed to have unlawfully registered Luxottica and Gelati Sanson shares in the name of a German company, Schema Partecipation GmbH, a subsidiary of Leonardo Finanziaria, the family holding company owned by Del Vecchio. According to inspectors from the Italian Finance Ministry, the company did not operate in Germany and had no staff, and all decisions relating to it were taken in Italy.
Italian tax inspectors are in possession of a document in which Arthur Andersen, the management consultants, suggest holding an annual general meeting of Schema Partecipation’s shareholders in Germany to avoid arousing the suspicions of public authorities, in case they judge that the company should be registered in Italy and thus subject to Italian fiscal law.
Del Vecchio’s lawyers maintain that the shares transferred to this company were part of his personal wealth and had generated no profits. The German company has appealed against the court’s findings. Luxottica has refused to comment, stating that the case concerns its chairman’s personal finances, not the company.