You know it’s hard out here for Italian fashion designers, even when you’ve got the likes of Selena Gomez and Mila Kunis rocking your threads. If you think you’re dreading tax season, just be thankful you don’t owe $440 Million to your country’s Tax Commission. Domenico Dolce and Stefano Gabbana are in some serious hot water– and have been for many years– over their taxes, and the income they have or have not been reporting. $440 Million sounds astronomical, but apparently these guys recently became billionaires, so I’m sure they’ll be fine. Click inside to learn more.
Fashionista has the story:
Good thing Domenico Dolce and Stefano Gabbana just became billionaires–because the designers may have to fork over a good chunk of their fortune to the Italian government.
According to WWD, Italy’s Tax Commission is fining the designers a whopping 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. The designers, for their part, deny all charges.
The sentence comes after years of yo-yo court decisions. The duo were first charged in 2010, after the Italian government accused them of not reporting over 840 million euros ($1.1 billion) 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.
Yikes! Sounds like these guys may have been doing some dodgy stuff, no? I mean, nothing’s been proven yet but if they moved significant parts of their brand to another country just to avoid taxes, I can see how that might look suspicious. Although, on the other hand, it could have just been a savvy business decision.
Either way, something tells me these guys will be okay. It’s D&G!