It’s an old court case dating back to 2004, but yesterday an Italian judge handed fashion designers Dolce and Gabbana a 1 year 8 month prison sentence for tax evasion on income of $1.34 billion. The pair won’t see any jail time though due to Italian law and their lawyers have stated that the case is groundless and they will appeal the verdict.
They were sneaky back in the day apparently and prosecutors say they sold their brand to holding company for next to nothing to avoid declaring taxes on royalties.
“Under Italian law, the pair would not go to jail because sentences of less than three years are served with house arrest or community service. Moreover, the designers have the right to appeal the verdict twice, and Italian courts often take years to reach a final decision.
Public prosecutor Laura Pedio dubbed the operation as a “sophisticated tax fraud” and originally asked for a two-year jail term for the duo. If the conviction is upheld, the pair would also need to pay a fine to Italy’s tax agency for €500,000.” [WSJ]
Mmmm…tax evasion or tax avoidance?