Dolce & Gabbana probed on taxes on 800 mln euros

Mon May 25, 2009 11:40pm IST

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(Refiles to change headline verb to probe)

MILAN May 25 (Reuters) - Italian financial police have notified Dolce & Gabbana of steps to recover taxes on what the designer duo described as a "completely abstract" 800 million euros ($1.12 billion).

Domenico Dolce and Stefano Gabbana, among Milan's top fashion names, said in a statement the issue stemmed from the sale of their brands in 2004, for which they received 360 million euros.

Financial police in the last few days "notified us of a request to recover taxation for 2004 on 800 million euros. It's an absurd demand based on a completely abstract calculation", said the designers, known for their use of gold and baroque embellishments.

They denied any wrongdoing, saying, "This higher taxable sum ... is a virtual figure we have never received, the result of a theoretical accounting exercise."

A source close to the matter told Reuters on Saturday the pair were being investigated for a tax matter that had no criminal implications.

The source said the Milan financial police had sent a report to the government's tax agency, which would decide what to do.

(Editing by Will Waterman)

((Milan newsroom +39 02 6612 9507, fax +39 02 801 149, milan.newsroom@reuters.com))

($1=.7145 Euro) Keywords: DOLCEGABBANA/

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