Dolce and Gabbana Found Guilty of Tax Evasion

The Italian design duo of their eponymous label Dolce & Gabbana were found guilty by a Milan court of tax evasion.  This criminal verdict is separate from the verdict the tax commission handed down in April.  For the criminal case, they are now sentenced to 20 months in prison and were also fined a half billion euros (or approximately $650 million) on top of the €344 million the tax commission levied.  Things are definitely not looking good for the newest members of the billionaires club, according to Bloomberg Billionaires Index.  

The Verdict: Dolce & Gabbana Tax Evasion Case

Dolce & Gabbana's tax evasion case has finally come to an end after almost 4 years of litigation. Italy's Tax Commission came down with a verdict on Saturday fining the Italian fashion house 343.4 million euros (or $440 million) plus interest for tax fraud.  While a lower court initially cleared the design duo of the evasion charges, Italy's highest court overturned that acquittal in November 2011 and ordered that the case be sent back to trial.  A quick recap can be found here.

After the verdict was rendered, Mr. Gabbana posted a rant on Twitter stating, "To be accused of something untrue is not a beautiful thing. But in the end who cares, we will all finish up six feet under." He further added, "I am interested in making clothes and that's all. They can do and say what they want."  Many fans voice their support in favor of Dolce & Gabbana which Mr. Gabbana has been generously retweeting.

The designers can still potentially avert the fine if they choose to appeal again.

Read More:
NYMag: Dolce & Gabbana Ordered to Cough Up $440 Million
The Telegraph: Stefano Gabbana’s Twitter tirade after tax evasion ruling on sale of D&G

Dolce & Gabbana's Italy Tax Evasion Case Goes Back to Court

Source: Vittorio Zunino Celotto/Getty Images Europe

Domenico Dolce and Stefano Gabbana, the Italian design duo behind the sexy fashion house Dolce & Gabbana, were charged with tax evasion in their native Italy in 2009 which was then dismissed by a lower court in 2011.  The Italian supreme court overturned it now the case is going to back to court.  The case involves a 2004 sale of the designer's eponymous label and lower priced line D&G to their Luxembourg-based holding company, Gado Srl.  Luxumbourg's corporate tax rate is 4% while Italy's is 45% which on its face seems incriminating enough.  

The  Italian tax police believes Gado was operating and managed in Italy and cites emails from around the time of the sale which shows that the designer's motives for the sale were for the explicit purpose of tax evasion.  Italy claims the label owes close to $500 million to the government.  Also, the designers would be looking at 5-year prison sentence if found guilty.