Dolce and Gabbana in Italy tax evasion trial

  • 3 December 2012
  • From the section Europe
Italian fashion designers Domenico Dolce (r) and Stefano Gabbana in a 2011 file image
Image caption The designers have denied all the charges against them

Italian fashion designers Domenico Dolce and Stefano Gabbana are on trial for tax evasion in the Italian financial capital, Milan.

The pair, of Dolce and Gabbana, are accused of owing tax on a sum of over a billion euros in Italy after moving their brand to Luxembourg in 2004.

Prosecutors allege that they sold their firms to a holding company for well below actual market value.

The designers deny the charges and have said that the allegations are "absurd".

They have not made any recent statements since Mr Gabbana criticised the high court's decision last year, threatening, in a tweet, to leave the country from which he draws much of his inspiration.

Each designer is accused of owing taxes on a sum of 416m euros (£337m; $540m), as well as the Luxembourg-based firm owing tax on 200m euros (£162m; $260m), according to Italy's La Repubblica newspaper.

Six other people, including the pair's tax consultant, are also on trial.

If found guilty, they risk a sentence of up to five years in prison.

At Monday's hearing, the designers' lawyers requested that the entire trial should be annulled due to procedural irregularities.

The court is due to rule on the request on 14 December.

The investigation into the firm's tax affairs began in 2007. They were initially cleared in April 2011 but Italy's highest court overturned that ruling, ordering that the case should be sent back to trial.

The designers are known the world over, with pop star Madonna and model Naomi Campbell among their famous clients.

Rates of both corporate tax, and tax evasion, are among the world's highest in Italy.

Prime Minister Mario Monti has made cracking down on evasion a national priority with a series of high-profile police raids in yacht marinas and chic ski resorts targeting people accused of not paying up.

In 2000, the late tenor Luciano Pavarotti paid more than nine million euros in back taxes when he settled a four-year dispute.

Former Argentine soccer star Diego Maradona is also reported to owe some 38m euros in unpaid taxes to the Italian authorities. He has said he wants to clear up his situation.

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