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20 June 2013

Dolce and Gabbana face suspended sentences for tax evasion

Fashion label partners Domenico Dolce and Stefano Gabbana have been convicted of tax evasion and face a suspended jail sentence of a year and eight months and a fine of €500,000 each, a Milan court ruled.

By Julia Duke

Designers Stefano Gabbana and Domenico Dolce

The pair, who made their mark on the fashion industry by designing for stars like Angelina Jolie, were found guilty for selling the brand to a Luxembourg holding company to avoid declaring €200m to authorities, the New York Times reports.

Targeted

In the midst of Rome’s economic condition, prosecutors claimed that the designers defrauded the Italian state by paying the lower tax rate in Luxembourg. According to the Financial Times, Italian holding companies registered in Luxembourg have recently been targeted by tax authorities.
In 2011, Mr Dolce and Mr Gabbana were acquitted of tax evasion and fraud. This time around, Italy’s highest court retried them for tax evasion but not for fraud. The designers denied all charges and have plans to appeal.

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