Luxembourg and tax evasion? Surely the two could never mix?

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The First Post Daily notes:

Fashion designers Dolce and Gabbana have been accused of a massive tax evasion scam. Italian prosecutor Laura Pedio said the pair had committed "a tax dodge that defrauded the state" after conducting a three-year investigation into the dealings of their company GaDo.

Domenico Dolce and Stefano Gabbana, along with five other people, are accused of channelling profits through Luxembourg, paying just three per cent tax on sales royalties instead of much higher Italian taxes. As a result, the Italian treasury has allegedly been defrauded of an estimated €420m.

A tax haven being used for tax evasion? Surely not?

Remember it’s the secrecy that does it (but see the comments below for elaboration)