Tax-Fraud Probe Against Domenico Dolce and Stefano Gabbana Has Ended, But They’re Still in Trouble

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Photo: Vittorio Zunino Celotto/Getty Images

Italian tax officials have ended their tax-evasion probe against Domenico Dolce and Stefano Gabbana, but formal charges could still be brought against them and other members of their company. The designers were accused last year of engineering a tax dodge by creating a holding company in Luxembourg, Gado Srl, to which they then sold their Dolce & Gabbana and D&G brands in 2004 so that they could avoid higher corporate taxes in Italy. According to the police, Dolce and Gabbana also lied about how much they sold their company for, and therefore owe more taxes for the transaction than they paid at the time. While the investigations against Gabbana and Dolce themselves have now been dropped, seven other members of the company are still being probed, and they may have to pay an estimated $1.12 billion in fines and back taxes.

Taxing Times [Vogue UK]