By  on March 28, 2011

MILAN — A final decision on whether Domenico Dolce and Stefano Gabbana will have to stand trial for alleged tax evasion will be made Friday following a preliminary court hearing held in Milan last week.

Judge Simone Luerti will preside and evaluate the evidence by prosecutor Laura Pedio and statements from the defendants. If found guilty at a trial, the designers could be personally liable for more than $1 billion in unpaid taxes and fines. They have denied any wrongdoing and the company declined comment.

According to the accusations, each designer allegedly evaded taxes totaling 416 million euros, or $569 million at current exchange. The designers issued a statement in May 2009 denying the allegations, which relate to the 2004 sale of the Dolce & Gabbana and D&G brands to the designers’ Luxembourg-based holding company, Gado Srl. They said the accusations were “based on a completely abstract calculation,” which enables the tax authorities to replace the sum actually paid with a hypothetical market value.

There is also a separate criminal probe into supposed tax irregularities at the Dolce & Gabbana group. The accusations address unpaid taxes of 200 million euros, or $273 million.

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