Fashion designers, Dolce and Gabbana jailed 20 months over £850 million tax evasion

Domenico Dolce and Stefano Gabbana were yesterday convicted of  tax evasion and sentenced to 20 months in prison.

The fashion designers were found guilty at a  court in Milan, Italy, of failing to declare £850million ($1.34billion) in income tax to authorities.

Prosecutors argued that the pair had evaded  taxes on income of £356million ($558million)  each and £172million ($268million)  through a Luxembourg-based company.

Domenico Dolce and Stefano Gabbana each sentenced to one year, eight months in jail by an Italian judge for failing to declare £850million ($1.34billion) in income taxDomenico Dolce and Stefano Gabbana each sentenced to one  year, eight months in jail by an Italian judge for failing to declare  £850million ($1.34billion) in income tax

The statute of limitations had run out on a  charge of misrepresenting income. The designers had denied the charges – and  their sentences were suspended pending an appeal.

Two years ago, a judge threw out a  tax  evasion and fraud case against the pair, whose label  Dolce&Gabbana is a  Milan fashion mainstay.

Italy’s high court in  November ruled,  however, the designers could be prosecuted for tax  evasion – though not for  fraud.

A case against the Italian designers, whose  A-list fans include Madonna, Beyonce and Angelina Jolie, was  looked into in  detail by the Italian Supreme Court.

Sentence: Dolce and Gabbana's lawyer Massimo Di Noia answers reporters' questions after the sentence of 20 months in jail at the Milan court today Sentence: Dolce and Gabbana’s lawyer Massimo Di Noia  answers reporters’ questions after the sentence of 20 months in jail at the  Milan court today
Prosecutors Laura Pedio and Gaetano Ruta gave each other a glance prior to the sentence. The Milan court convicted fashion designers Domenico Dolce and Stefano Gabbana of tax evasionProsecutors Laura Pedio and Gaetano Ruta exchanged a  glance prior to the sentence. The Milan court convicted fashion designers  Domenico Dolce and Stefano Gabbana of tax evasion

This followed efforts to clamp down  on tax  avoidance in Italy, as experts revealed that an estimated £96billion  ($150billion) a year was lost in undeclared revenues.

The investigation found that Mr  Dolce, 54,  and Mr Gabbana, 50, sold their Milan-based labels to their  own holding company,  Gado srl, which is based in Luxemburg – a notorious tax haven.

Prosecutors said at the time that  both the  Dolce & Gabbana and D&G brands were sold for just  £309million  ($483million),  about one-third of their true market value,  which was decreed a further attempt  to avoid paying millions in taxes.

A-list endorsement: Actress Scarlett Johansson is one of the celebrity faces of Dolce & GabbanaA-list endorsement: Actress Scarlett Johansson is one of  the celebrity faces of Dolce & Gabbana
Longtime brand: Domenico Dolce and Stefano Gabbana went into business 28 years agoLongtime brand: Domenico Dolce and Stefano Gabbana went  into business 28 years ago

As a result the two designers, who  founded  their company 28 years ago, were ordered to stand trial last  November and the  case began earlier this year.

The  designers vehemently denied the  allegations and called the charges ‘absurd’ and  based on ‘a completely  abstract calculation’ of their companies’ market  value.

But in April this year, they lost their appeal.

The Milan provincial tax commission  ruled in  favor of Italy’s tax authority, Agenzia delle Entrate, finding a ‘conduct of  abuse with the only goal of obtaining a fiscal advantage’.

Read more: DailyMail

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