Increasing financial woes and austerity in Italy have lead to a clampdown on tax evasion from big businesses. Dolce and Gabbana are one of the huge companies to feel this, with the legendary designers being handed a one year suspended prison sentence and a fine of €500m.

This isn’t all, though; the huge fine suggests that police may launch a further enquiry into the company, which could lead to shares being seized in the company and assets claimed. Luigi Macioce, tax partner in law firm Withers’ Italian practice, said the decision by the court was “further evidence that the Italian tax authorities are looking more aggressively than ever at evasive or abusive schemes implemented by Italian companies of all sizes.” He added:“That said, it is true that in the past many Italians have used internationalisation as a means of obtaining tax advantages through the use of abusive tax avoidance schemes.” Mr Dolce and Mr Gabbana were not in court, but they have denied any wrongdoing, despite a judge ruling that they sold their brand to a Luxembourg-based holding company in 2004 in order to avoid declaring more than €100m.

Given Italy’s current troubles, there’s no doubt Dolce and Gabbana are a victim of increased scrutiny of big business. Although, having said that, the culture of tax evasion is so rife in both Italy and most of the Western world, these measures will come as a relief for many.

Dolce and GabbanaDolce and Gabbana pictured here with Katy Perry

Dolce and Gabbana
And here they are with Bianca Brandolini d'Adda, and Monica Bellucci