Dolce & Gabbana Charged with Tax Evasion

Designers Domenico Dolce and Stefano Gabbana

Designers Domenico Dolce and Stefano Gabbana

Milan—If you think the IRS gives you problems: designers Domenico Dolce and Stefano Gabbana of Dolce & Gabbana fame were found guilty today of tax evasion and a Milan court sentenced them both to one year and eight months in jail.

According to press accounts, the duo had denied they evaded more than 400 million euros in taxes when they sold their D&G and Dolce & Gabbana brands to a holding company, Gado, they had established in Luxembourg in 2004 where they would pay a lower tax rate than in Italy.

However, prosecutors maintain that the duo evaded taxes on income of 416 million euros each and 200 million euros through the Luxembourg company.

In April 2011, a judge threw out a tax evasion and fraud case against the pair, but Italy’s high court overturned that ruling saying they could be prosecuted for tax evasion but not for fraud.

A Milan court ordered Dolce and Gabbana to pay a 343 million euros in fines earlier this year.

Dolce and Gabbana might never actually spend any time in prison despite Wednesday’s sentence since they are likely to appeal the verdict.

 

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com