Designers Domenico Dolce and Stefano Gabbana are to stand trial for tax evasion totalling €416 million. Fashion designing duo Domenico Dolce and Stefano Gabbana along with six alleged co-conspirators will soon face trial in Milan for criminal tax evasion totally 1 billion euros.
After having been charged then acquitted of tax evasion–then charged again–Dolce & Gabbana, design duo will appear in an Italian court on December 3 2012 The designing duo are accused of evading €416 million of tax in relation to the sale of the Dolce & Gabbana and D&G brands to the designers' Luxembourg-based holding company Gado Srl. The Italian police consider Gado Srl to be a legal body set up to enable the pair to avoid the country's high corporate taxes.
The Guardia di Finanza, an Italian police force under the authority of the national minister of economy and finance, first brought the charges against the pair and five of their business associates in 2007, however, in April 2011 they were dismissed by a lower court, which deemed there was no foundation for a trial. The Italian Supreme Court overturned that decision last November, saying that "tax avoidance, or tax mitigation, on an earnings declaration is a criminal offence under the law," reports WWD . Previously, tax avoidance was not considered a criminal offence
The D&G and Dolce & Gabanna brands were sold to a holding company in Luxembourg in 2004, and prosecutors maintain that this ownership transfer took place explicitly to avoid paying taxes in Italy.
Investigations into the pair's alleged tax evasion began in 2007, but they were cleared of all charges. In November, a higher court overturned the not-guilty verdict, opening up the possibility of a new investigation.
The acquittal on charges of tax fraud remains intact, but the current case challenges the previous ruling of tax elusion and goes after Dolce, Gabanna, and six other for tax evasion--using illegal methods to avoid paying taxes.
Celebrity tax evasion cases, like Luciano Pavarotti's 10 million euro of back taxes settled in 2000, are typically settled outside of court to avoid negative press. If the Dolce and Gabanna case proceeds, it will be one of the first of its kind to go to trial
Although neither Dolce & Gabbana have commented on the trial date, both have previously denied any wrongdoing and have claimed they have a clear conscience.
If convicted, the designers and their co-accused business associates could face up to three years in prison, or a fine of up to €1 million.
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