20 Jun 2013

Designers sentenced over tax evasion

6:18 pm on 20 June 2013

Italian fashion designers Domenico Dolce and Stefano Gabbana have each been sentenced to jail for 20 months on tax evasion charges.

They were accused of hiding millions of euros from Italian tax authorities.

The pair, whose customers have included Madonna, Kate Moss and Kylie Minogue, were not at the trial, deny the charges and have appealed, the BBC reports.

Dolce and Gabbana have not commented on their sentences, which have been suspended pending the appeal.

The investigation by the Italian authorities began about six years ago as part of a government plan to crack down on tax avoidance.

At the hearing on Wednesday, the judge ruled that the designers moved their brand to a Luxembourg-based holding company Gado - an anagram of their two surnames - in 2004. He said they had done this to avoid declaring taxes on royalties of about €1 billion.

Prosecutors alleged they sold the business for well below actual market value. They were initially cleared of the charges at a previous trial in April 2011, but Italy's highest court overturned that ruling and ordered that the case should be sent back.