Fashion Law: Italy’s Supreme Court – Acquittal of Dolce & Gabbana
If you recall earlier this year, in January, we reported that the dynamic designer duo behind Dolce & Gabbana, Dominico Dolce and Stefano Gabbana, were under investigation for tax evasion. Italian tax authorities began conducting a survey back in 2007 in an effort to crack down on as many high-profile cases as they could during the brink of the financial crisis.
In recent news, the Italian Supreme Court cleared both designers behind the brand of these charges stating “fiscal elusion, on its own, has no penal relevance.” This statement and further motivations behind the court’s decision were officially released this past October, a year after the last hearing in the trial (October 2014).
Furthermore the court commented that the “fiscal advantage is not illegal only because the entrepreneur exploits the opportunities offered by the market or by a more convenient fiscal legislature.” The fiscal advantage is deemed illegal only if it “is obtained through situations that are non-consistent with reality or are a pure ploy.”
The designers were charged with tax evasion totaling $533.2 million associated with the 2004 sale of the Dolce & Gabbana and D&G brands to the designers’ holding company, Gado Srl. The Supreme Court in this case addressed the alleged omission of taxes committed by the designers and corresponding defendants and highlighted “the mistake” of the judges amongst the lower level courts who believed the prosecutions allegations.
These lower level judges strayed from the investigations, “almost unexplored and contradictory,” about the reality of the Luxembourg headquarters, and “the effectiveness of the activities taking place there and the reasons behind the choice of that country as the location for Gado.”
The tax agency also requested compensation for damages totaling $550,000 at current exchange—a request that was denied by the Supreme Court who specified the damages “cannot be qualified as economic and even less so as moral.”
For more information related to tax issues, check out www.fashionboss.comby