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June 21, 2013

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Designers Dolce and Gabbana Convicted of Tax Evasion – May Have a Chance to Design Latest Prison Wear

World famous designers Domenico Dolce and Stefano Gabbana of Dolce & Gabbana fame have been convicted of evading taxes on over 1 billion euros ($1.3 billion) in royalties. The criminal act involved selling off some of their main brands to a Luxembourg holding company allegedly to evade paying taxes.

The judge handed down a suspended one year and eight month prison sentence for the two fashion gurus. Under Italian law, sentences under three years only result in house arrest or community service. Either way the pair have steadfastly denied any illegal actions and have already challenged the case for appeal.

Italy has been on a tax fraud and evasion crackdown over the last few years because it is estimated that as much as 120 billion euros a year in taxes are unpaid. Reducing that number even by a quarter would help immensely with the economic crisis gripping the nation and the European Union as a whole.

Italian courts are notorious for taking their time with cases, and this appellate review should be no exception. In the interim, it’s unlikely that we should worry that D&G won’t be making anymore cool shades for us to wear during the summer.

Offshore Accounts/International Tax Disputes