Domenico Dolce and Stefano Gabbana have been found guilty of tax evasion. Once again!
As you’ll recall, back in June 2013, Dolce & Gabbana were each sentenced to one year and eight months in prison after being found guilty of tax evasion. The Italian designers were found to have evaded €416 million of tax. Authorities allege that their sale of the Dolce & Gabanna and D&G brands in 2004 to a Luxembourg-based holding company, Gado Srl, was to evade higher corporate taxes in their home country of Italy. The judge said that the only purpose in setting up a company such as Gado was “to transfer earnings derived by royalties in Luxembourg” and that they were effectively the “beneficiaries.”
The designers promptly filed an appeal. They vehemently deny the charges and in response to July’s ruling and subsequent statements by Milan’s Councillor for Commerce Franco D’Alfonso in which he referred to the duo as “tax evaders”, Dolce & Gabbana closed their shops for three days in protest. They hung up window signs that said “CLOSED FOR INDIGNATION” and took to twitter saying “The City of Milan makes me sick!!!” and “Shame on you!!! Boors” They added that the shut-down of the stores was a “signal of our disdain.” Attached to the statement was a table of the top financial contributors to the city of Milan for 2005, showing Dolce and Gabbana in fourth and fifth place respectively.
The verdict was announced this afternoon after hours of consideration by a three-judge panel who decided to uphold last June’s guilty verdict. The decision comes as somewhat of a surprise following the prosecutor’s request to the court to dismiss the charges against the designers in March of this year. Gaetano Santamaria told the appeal’s court that the allegations were groundless because Gado was a real operating company rather than a shell company created to avoid paying tax in Italy.
A spokesperson for the brand could not be reached this afternoon for comment.