Back in January, Forbes counted Dolce & Gabbana as the fashion industry’s newest billionaires. Both Domenico Dolce & Stefano Gabbana each have a networth exceeding $1B and it comes at a perfect time because collectively they have a hefty ammount of money that they have to pay back to the Italian Tax Comission.
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According to WWD, the designers are being charged an insane 343.4 million euros, or $440.2 million at current exchange, plus interest, for alleged tax evasion
Dolce and Gabbana are accused of omitted and unfaithful earnings declarations, specifically related to the 2004 sale of the Dolce & Gabbana and D&G brands to the designers’ Luxembourg-based holding company, Gado Srl. According to Italy’s Internal Revenue Agency, Dolce and Gabbana moved the majority of their wealth to Luxembourg, a well-known tax haven, with the sole purpose of avoiding higher corporate taxes in their home country. Both designers deny all charges but even an Italian Uncle Sam doesn’t like being cheated.
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The duo were first charged in 2010, after the Italian government accused them of not reporting over 840M euros ($1.1B) in sales. However, the charges were dropped by a lower court due to lack of evidence. But, in 2011, Italy’s Supreme Court re-opened the case and also ruled that tax avoidance, or tax mitigation, on an earnings declaration is a criminal offense under the law, and would justify a heftier fine and/or jail time. The $440 million confirms this charge, and denies an appeal Gabbana and Dolce filed with the court. The designers may still avoid the fine by if they decide to appeal and wait for a third degree sentence. It seems like a long process but we’re pretty sure $440M is worth every second.
Stay tuned for further information once it is released.
