Dolce & Gabbana slapped with fine for tax evasion

ROME (AFP) - An Italian court has ordered the Dolce & Gabbana fashion house to pay a fine of 343 million euros (S$545 million) plus interest for failing to declare millions of euros in revenue to tax authorities, local media reported.

The international fashion giant, whose celebrity clients include Beyonce and Madonna, plans to appeal the verdict and the payment of any fine would be suspended pending the appeal, reports said.

The fashion house was found to have "violated legislation with the sole objective of procuring a fiscal advantage", according to the ADN Kronos agency which quoted the verdict.

Domenico Dolce and Stefano Gabbana were accused of having transferred control of their brands to a shell company in Luxembourg in 2004 and 2005, thereby avoiding paying Italian taxes of around 420 million euros.

Prosecutors have argued that setting up the Luxembourg company Gado - an acronym of the surnames of the two designers - while the company was still operating out of Italy, was an attempt to defraud the state.

The pair have repeatedly denied the accusations.

"All that I care about is making clothes, that's all. Let them do and say whatever they want," Gabbana said in a tweet following Saturday's verdict, which was not publicly announced and was reported in the local press late on Sunday.

"To be accused of something that's not true is not a pretty thing, but the heart of the matter is, who cares, we'll all end up in the ground in the end."

Investigators completed a probe into the designers, as well as five other people, in 2010 and the case was dismissed in April 2011 but reopened in November last year when Italy's highest court ruled the pair must face trial.

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