Fashion designers Dolce and Gabbana sentenced to 20 months in prison after being convicted for £850million tax evasion

Domenico Dolce and Stefano Gabbana were today convicted of tax evasion and sentenced to 20 months in prison. The fashion designers were found guilty at a court in Milan, Italy, of failing to declare £850million ($1.34billion) in income tax to authorities. Prosecutors argued that the pair had evaded taxes on income of £356million ($558million) each and £172million ($268million) through a Luxembourg-based company. The statute of limitations had run out on a charge of misrepresenting income. The designers had denied the charges - and their sentences were suspended pending an appeal. Two years ago, a judge threw out a tax evasion and fraud case against the pair, whose label Dolce&Gabbana is a Milan fashion mainstay. Italy's high court in November ruled, however, the designers could be prosecuted for tax evasion - though not for fraud. A case against the Italian designers, whose A-list fans include Madonna, Beyonce and Angelina Jolie, was looked into in detail by the Italian Supreme Court. This followed efforts to clamp down on tax avoidance in Italy, as experts revealed that an estimated £96billion ($150billion) a year was lost in undeclared revenues. The investigation found that Mr Dolce, 54, and Mr Gabbana, 50, sold their Milan-based labels to their own holding company, Gado srl, which is based in Luxemburg - a notorious tax haven. Prosecutors said at the time that both the Dolce & Gabbana and D&G brands were sold for just  £309million ($483million), about one-third of their true market value, which was decreed a further attempt to avoid paying millions in taxes. As a result the two designers, who founded their company 28 years ago, were ordered to stand trial last November and the case began earlier this year. The designers vehemently denied the allegations and called the charges 'absurd' and based on 'a completely abstract calculation' of their companies' market value. But in April this year, they lost their appeal. The Milan provincial tax commission ruled in favor of Italy's tax authority, Agenzia delle Entrate, finding a 'conduct of abuse with the only goal of obtaining a fiscal advantage'.