Domenico Dolce and Stefano Gabbana has been acused of Tax Evasion once again by tax officials in Italy. The men behind the world famous brand could have to pay up to R8.2 billion ($1.12 billion) in fines. According to authorities, Dolce and Gabbana did not pay enough for the sale of the Dolce & Gabbana and D&G brands to their Luxembourg-based holding company Gado Srl in 2004.
The designers reported the sale for both companies at R3 billion ($447.8 million) whereas authorities estimate it to more around the region of R9.3 billion ($1.37 billion). If this were the case, as a very reliable source has led me to believe, by reporting a figure almost 3 times less then the actual sale's figure they would be liable to pay a much lower tax percentage. It is the second giant tax mess for the Dolce boys related to Gado and could possibly be the first of many as it seems the Italian government is quite infuriated with Domenico Dolce and Stefano Gabbana as the company was set up in Luxembourg for the purpose of avoiding high Italian taxes.
Dolce and Gabbana say they're prepared to vigorously defend themselves, which should be quite entertaining and turn out into a lengthy battle as it took Roberto Cavalli six years to clear up his tax evasion charges in Italy.
*Dollar - Rand conversion according to 8 Nov 2010's exchange rate
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