Dolce & Gabbana Owe $440 Million in Taxes!

YIKES!   Fashionista has the scoop on Dolce & Gabbana’s tax problems:

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

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.”