Tax dodge sets D&G back €343 million

AFP-JIJI

An Italian court has ordered the Dolce & Gabbana fashion house to pay a fine of €343 million ($441 million) plus interest for failing to declare millions of dollars in revenue to tax authorities, local media said.

The international fashion giant plans to appeal the verdict and the payment of any fine would be suspended pending the appeal, reports said.

The fashion house was found to have “violated legislation with the sole objective of procuring a fiscal advantage,” according to the ADN Kronos agency that quoted the verdict.

Domenico Dolce and Stefano Gabbana were accused of having transferred control of their brands to a shell company in Luxembourg in 2004 and 2005, thereby avoiding paying Italian taxes of around €420 million ($550 million).

Prosecutors have argued that setting up the Luxembourg company Gado — an acronym of the surnames of the two designers — while the company was still operating out of Italy, was an attempt to defraud the state.