The designers plan to plead their case at Italy’s supreme court after their guilty verdict was upheld and they were sentenced to 18 months in jail at the appeal for their ongoing tax evasion case on Wednesday (30.04.14).
The duo are accused of hiding millions of euros from Italian tax authorities by using Luxembourg-based holding company Gado to avoid paying taxes on around €1 billion (£820 million) of royalties.
Massimo Dinoia, the lawyer representing Dolce and Gabbana, said: “I am speechless and astounded, this sentence is inexplicable. After all, the general prosecutor already realised that there was really nothing to the case. We will surely present our appeal to the Corte di Cassazione. This is an unfair verdict and we are sure the Cassazione will reform it.”
The designers and their accountant, Luciano Patelli, were previously sentenced to 20 months each and fined up to €10 million in a verdict issued last June, but the initial sentence was reduced by two months yesterday.
An investigation was launched in 2008 when Italian tax authorities were keen to catch people evading tax when the recession hit. Fashion houses were scrutinised as they performed well during this period, despite many other companies struggling. A partner at Grant Thornton in Milan told The Guardian newspaper: “Luxury is one of the few sectors to have done well in recent years.
“It is easier to go and ask for money where there is money as opposed to going to a troubled sector.” However, according to Italian law, the defendants won’t have to serve jail time as their sentences are below the two year minimum.