Rome: The owner of Italian fashion giant Gucci is set to pay a record fine of nearly 1.5 billion euros ($1.7 billion) in a tax evasion case, according to media reports Friday.
"Lawyers are still negotiating with the tax authorities over a few hundred million euros, but the fine that the (French luxury) Kering group is about to pay is the highest (in Italy)," the La Stampa newspaper said.
"It's a cheque for nearly 1.5 billion euros," it added.
It follows a probe by Milan's public prosecutor into the fashion house on suspicion of declaring several years worth of Italian sales in Switzerland, thereby saving around 1.3 billion euros in domestic tax.
Kering is expected to sign an agreement on the amount due on May 2, according to the financial newspaper Il Sole 24 Ore. "At this stage, no agreement has been reached on any specific amount," the French group said.
Earlier this year, Kering said it faced a claim for 1.4 billion euros in unpaid Italian taxes, adding it contested the preliminary findings.
The group has consistently denied avoiding tax, saying its activities were fully compliant with all tax obligations.
The company's Swiss-based Luxury Goods International (LGI) subsidiary has been under investigation for allegedly avoiding tax on earnings generated elsewhere.
Most of the allegations centre on Gucci, whose offices in Milan and Florence were raided by Italian police in late 2017.
In November, Milan prosecutors wrapped up their probe into alleged tax evasion of more than 1 billion euros by Gucci for revenues booked in the years between 2010 and 2016.
The prosecutors say that revenues booked through LGI should be taxed in Italy and not in Switzerland.
By agreeing to a settlement, Kering would be spared from having to pay interest and sanctions for late tax payments, which one source said would have added around 500 million euros to the final bill.
Gucci's Chief Executive Marco Bizzarri and former CEO Patrizio Di Marco are under investigation in the case.
That investigation is expected to conclude with a separate settlement once the agreement on the tax dispute has been signed, one of the sources added. Lawyers for Bizzarri and Di Marco declined to comment.