Milan (Italy), 6 December 2013 – Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX) today announced that the tax audit started in January 2013 by the Italian auditors concerning the year 2007 has ended with a determination relating to transfer pricing (i.e. the methods whereby intra-Group prices are determined) involving increased charges of Euro 33 million.
The audit concerned ordinary transactions involving the export of finished products from Italy to the Group’s foreign subsidiaries located in countries that do not have a privileged tax regime. Accordingly, the auditors’ assessment relates to income already being regularly taxed at the foreign subsidiary level. Consequently, the Company will evaluate appropriate initiatives aimed at recovering the sums paid.
The Company has always acted in accordance with the law and without any intent to avoid tax (while reporting higher profitability than its main industry competitors). Furthermore, the transfer pricing method adopted in 2007 is the same as the one used in previous years and no allegations of irregularities were ever made in the course of the prior-year audits.
The Company remains firmly convinced that its conduct was appropriate for the reasons illustrated in detail in the documents submitted by the Company in connection with the audit. Nonetheless, the Company has decided to accept the auditors’ report on their findings and pay the resulting sums for the year 2007. The Company notes that the subject matter of the dispute is largely subjective in as much as it pertains to an evaluation of the arm's length nature of the prices applied to foreign subsidiaries. Thus, the subject lends itself 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.