Fashion designer Karl Lagerfeld is being investigated on allegations of tax evasion in France. The accusations were first reported by the French publication, L’Express, earlier this week.
Lagerfeld is suspected of evading more than €20 million ($21.7 million US) in taxes by setting up a series of companies to use as funnels to tax-favored Ireland, the British Virgin Islands, and the United States. If the latter comes as a surprise, it’s because while Americans think that US tax laws are some of the most onerous in the world, our tax laws can be more favorable than those in other countries. That, together with our relative economic and political stability, can make the US a bit of a tax haven for those hoping to reduce their overall tax burden, as authorities alleged was the case with FC Barcelona star Javier Mascherano.
French tax authorities have not confirmed the Lagerfeld investigation, citing privacy laws.
Caroline Lebar, a spokesperson for the designer, says that Lagerfeld “had no wish to evade the law,” and trusts his financial advisers to work out the situation with the tax authorities. The designer has not offered further comment about the controversy to the press or to his fans on social media, including his accounts on Twitter and Instagram.
The German-born Lagerfeld, whose cat brought in €3 million ($3.27 million US) in modeling gigs in 2014, is based in Paris, where he oversees the Chanel fashion house. He is also the fashion director for Fendi, an Italian-based label. There have been no indications that the investigation involves either Chanel or Fendi.
The world of high fashion is no stranger to allegations of tax evasion. In 2014, Italian design duo Stefano Gabbana and Domenico were cleared of tax evasion charges after initially being found guilty on charges; the pair had originally been charged with failing to report millions in income. That same year, Miuccia Prada, and her husband, Prada chief executive Patrizio Bertelli, were said to be under investigation in Milan on charges of tax evasion. And just recently, Israeli fashion model Bar Refaeli was charged with lying about her residency in order to evade tax on millions of dollars in income earned abroad.