tax evasion

The reputation of Italian family businesses will escape unscathed despite news of yet another high-profile family being hit by allegations of tax avoidance, according to a family business academic.

This week, family-owned Prada announced that its two chief executives, Miuccia Prada and Patrizio Bertelli, are under investigation for inconsistent tax filings during the decade their holding company was based in Luxembourg.

Italy’s Marzotto family, the former owner of Valentino Fashion Group, has made headlines for alleged tax evasion during the sale of the clothing company in 2007.

The country’s police have reportedly confiscated assets worth €65 million, including a 15th century castle, owned by the Marzottos.

According to the police in Milan, the family made profits of around €200 million following the sale of its stake in Valentino but did not pay any tax on the gains.

A new study by consulting firm Booz & Co says that wealth managers in Switzerland could lose as much as €41 billion as a result of a tax crackdowns by the UK and German governments.

Based on interviews with senior wealth management experts in Switzerland, the report also said that private banks will also lose around €1 billion in revenues as clients with offshore assets start withdrawing their money.

But some reckon that the tax treaties signed with the UK and Germany will benefit the Swiss financial sector in the long run.

The US government’s widening investigation into six more Swiss private banks could cause the country’s banks to cut all ties with American clients, according to a top London lawyer.

Edward Reed, a partner at London-based Macfarlanes, told Campden: “Swiss private banks will begin to pull out from US exposed deals – they will stop handling not just US nationals, but also green card holders and anyone even remotely affected by tax regulations.”