Giorgio Armani settles tax dispute with Italy for 222 million pounds

Italian fashion company Giorgio Armani has paid 222 million pounds to the

country's tax authorities to settle a dispute concerning payments from the company's subsidiaries abroad.

Last week, Italian newspaper Il Sole 24 reported that all tax claims against Giorgio Armani, which reported sales of over 2 billion euros in 2012, were officially closed.

A company spokesman confirmed that the payment to the Italian tax authorities concerned Giorgio Armani's subsidiaries abroad, but declined to comment further.

Italy's tax authorities are said to have become more interventionist since the recession began, with companies in the luxury goods industry under heavy scrutiny as the country's central back estimates over 200 billion euros could be derived in unreported taxes.

Fashion companies in particular are being targeted by the country because of the international reach of their businesses, with few tax cases rarely ending up in court. One noticeable case occurred last June, when Italian designers Domenico Dolce & Stefano Gabbana were found guilty of tax evasion and sentenced to nearly two years in prison.

However, last month a Milan general prosecutor dismissed the case as "groundless" and acquitted the charges, citing common sense as a reason for the change of heart.