I’ve been following this case through the highs and lows of it all, and it seems that finally, there is a conclusion. The design duo behind one of the most revered Italian fashion houses, Domenico Dolce and Stefano Gabbana, have been found not guilty by Italy’s highest court. This legal saga has been going on for 4 years with a lower court and an appeals court both finding the designers guilty of tax evasion and were sentenced to 18 months of jail time.
The design house was accused of committing tax evasion by selling their brand to the Luxembourg-based holding company, Gado Srl, in an effort to avoid higher corporate taxes in Italy, where the brand was originally based. The duo appealed the lower courts’ decision to Italy’s highest court with the their defense team arguing to the court that the two should not be held liable for any wrongdoing because they are of creative minds and don’t deal “with bills and schemes to cut their tax rate.”
Yesterday, a five-member jury deliberated the case and arguments presented and ruled that there were no grounds for a case, thus overturning the lower courts’ decisions.
And so, another legal saga concerning the tax practices of Italian brands comes to end. And, while the outcome is favorable for Dolce and Gabbana, other Italian brands would do well to take note and make sure their tax practices are above board, or else they may also be embroiled in a legal battle for years that could affect the reputation of the brand.