Safilo Group to Pay Italian Revenue Agency €21 Million

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PADUA, Italy— Safilo Group S.p.A. announced that the tax audit, started in 2011 by the Italian Revenue Agency with respect to its wholly owned subsidiary, Safilo S.p.A., concerning the year 2007 and subsequently extended to the years 2008, 2009, 2010 and 2011, “has ended with a determination relating to transfer pricing (i.e., the method whereby intragroup prices are determined), the interpretation of the “beneficial owner” concept (i.e., the amount of withholding tax levied on interest paid on bonds issued by a Luxembourg entity of the Safilo Group) and the method of taxation of foreign source dividends, involving an increased charge of €21 million—of which €7 million already accounted in the financial statement as at Dec. 31, 2012.

It is to be paid in 12 quarterly installments starting from February 2014.

A statement from the company said, “The Group has always acted in accordance with the law, the administrative rulings and jurisprudence available” and “remains firmly convinced that its conduct was appropriate.”

Nonetheless, Safilo S.p.A. said it “has decided to accept the settlement proposal, as the key matters of the dispute are largely subjective, in as much as they imply, for instance, the evaluation of the arm’s length nature of the application of prices to foreign subsidiaries. The subject matters therefore lend themselves to divergent positions that are not easy to resolve in litigation, except at the cost of long and expensive defense proceedings with an inevitably uncertain outcome.”