Home > News > World
Thursday May 1, 2014 MYT 12:50:03 AM
Thursday May 1, 2014 MYT 12:51:14 AM
MILAN (Reuters) - Fashion designers Domenico Dolce and Stefano Gabbana were each given a reduced, suspended sentence of 18 months in jail on Wednesday for a conviction on charges of hiding hundreds of millions of euros from Italian tax authorities.
Italy's appeals court upheld a verdict issued last June against the pair, who are as famous as the stars they dress, on charges of using Luxembourg holding company Gado to avoid paying taxes on royalties of about 1 billion euros (817.72 million pounds).
The sentence was reduced from 20 months because the statute of limitations applied to certain facts in the case.
A lawyer for Dolce and Gabbana, who have always denied any wrongdoing, said they would appeal the decision. "I am speechless. We are all shocked. The judgement is inexplicable and we will appeal," Massimo Dinoia said after the judgement.
A Milan prosecutor had asked the court in March to clear the pair, who - in a protest last year at being "pilloried" - closed the Milan shops where they sell clothes and accessories inspired by Dolce's native Sicily.
The previous decision, by a lower court, handed the duo suspended jail sentences of 20 months each and imposed a fine of up to 10 million euros over avoidance of the payments in Italy, where corporate taxes are among the highest in Europe.
The case stems from an investigation that began in 2008 when Italian tax authorities stepped up their fight against tax evasion as a global financial crisis began to bite.
Fashion companies have fallen under the scrutiny of Italy's tax authorities partly due to the fact the sector has performed well during the country's longest recession since World War Two.
"Luxury is one of the few sectors to have done well in recent years," said a partner specialising in tax at Grant Thornton in Milan who declined to be named.
"It is easier to go and ask for money where there is money as opposed to going to a troubled sector."
The cases rarely come to court, however.
Giorgio Armani paid 270 million euros to tax authorities in early April to settle a dispute over payments from the group's subsidiaries abroad.
Prada Holding, which controls Prada, paid a reported 400-420 million euros to settle taxes in Italy after completing a process of voluntary disclosure in December.
(Reporting by Manuela D'Alessandro, Writing by Isla Binnie; Editing by Mark Heinrich)
Two soldiers killed, 31 wounded in PKK suicide attack in east Turkey
Myanmar leader goes to disaster zones as floods batter countryside
Grassroots mayors embody Spain's divisions as election nears
Egypt postpones verdict in retrial of Al Jazeera journalists to Aug. 29
Venezuela supermarket looting leaves one dead, dozens detained
Analysis - Germans fret over Europe's future but still believe
In rural China, shoppers go online with a little help
Selfies and six packs to derail Arsenal's title hopes: Keane
Fishing for your dinner There is nothing like landing your own catch to beat the growing cost of living
Copyright © 1995-2015 Star Media Group Berhad (ROC 10894D)(Formerly known as Star Publications (Malaysia) Berhad)