UK Tax Strategy

OVERVIEW

Dolce & Gabbana UK Limited (the "Company") is a company resident in the United Kingdom ("UK") and controlled by Dolce & Gabbana S.r.l. (also, the "HQ").
Dolce & Gabbana London Branch (the "London Branch") is a permanent establishment in UK of Dolce & Gabbana S.r.l..
The Company and the London Branch (the "UK Entities") are part of the Dolce & Gabbana Group (also, the "Group").
Dolce & Gabbana Group has adopted a Code of Ethics (the "Code"), which is published on Dolce & Gabbana institutional website.
The fundamental values and rules of conduct, set out in the Code, guide the action of the Dolce & Gabbana Group in relation to its stakeholders, in the pursuit of its corporate and social mission. The principles contained within the Code direct that the business operates in an ethical and compliant manner and in accordance with national and international laws, regulations and decisions. As a part of the Dolce & Gabbana Group, the UK Entities demonstrate business behaviours that reflect those of the Dolce & Gabbana Group globally.
Our tax strategy (the "Strategy") applies to all taxes relevant to the UK business and takes effect from the date of publication until superseded or otherwise replaced.

UK TAX STRATEGY

This Strategy is published in accordance with paragraph 19(4) of Schedule 19 of Finance Act 2016.
This document sets out the UK Entities's approach to conducting their tax affairs and dealing with tax risk for the year ending March 31st, 2018.
As previously mentioned, the UK Tax Strategy adopts the principles set out in Dolce & Gabbana Code of Ethics.

Risk management and governance arrangements

In line with the Code guidelines adopted globally by Dolce & Gabbana Group, the UK Entities are committed to ensuring that their tax affairs are transparent and compliant with all tax laws applicable in UK and are in line with international best practice (e.g. OECD Transfer Pricing Guidelines).

The Goup takes a conservative approach to tax planning and does not pursue aggresive tax planning arrangements.
Ultimate responsibility for the tax affairs of the company sits with the Board of directors. The Board of Directors understand the importance of tax compliance and how it is achieved.
The day-to-day tax activities are undertaken, with the support of UK external advisors, by the administrative management team who ensure that the UK Entities comply, in an accurate and timely manner, with all applicable tax laws and regulations, including:

- filing all mandatory tax returns, reports and disclosures;
- paying all direct and indirect taxes, levies and duties by the due date;
- maintenance of the proper records and documentation to support the tax filings;
- utilising, as appropriate, available tax reliefs and incentives. We will not, however, use such reliefs and incentives for purposes which are knowingly contradictory to the intent of the legislation.

With reference to non-current or extraordinary transactions or operations, the tax consequences and risks are identified by the administrative management team with the support of UK tax advisors.
The UK Entities, as a part of Dolce & Gabbana Group, apply the OECD standards adopted in the Group Transfer Pricing policies . The Group ensures that the latter complies with the arm's length principle.
Dolce & Gabbana Group, at a headquarters ("HQ") level, supervises the commitment of the UK Entities in ensuring the Tax Strategy.

Attitude towards tax planning (in the context of UK taxation)

The UK Entities's tax planning approach reflects the strategy adopted at a Group Level.

The Group takes a conservative approach to tax planning and does not engage in tax planning arrangements where there is considered to be a significant risk of challenge by HMRC. The Group aims to ensure full disclosure and be transparent about the filing position that it has taken.

The Group's tax planning aims to support the commercial needs of the business and as such, the HQ Tax Team is sometimes involved in the commercial decision-making processes and when it happens it provides appropriate input into business proposals to ensure a clear understanding of the tax consequences of any decisions made.

External tax advise might be sought with respect to areas of complexity or uncertainty in order to met the requirements of the Tax Strategy. Advice may also be sought from HMRC directly for assistance in interpretation or application of tax legislation.

Level of Risk

In line with the Tax Strategy, the UK Entities comply, in an accurate and timely manner, with all applicable tax laws and regulations as well as with international best practises.
External tax advice might be sought with respect to areas of complexity or uncertainty in dealing with compliance or extraordinary issues.

The Tax Strategy aims to minimize the UK level of risk which substantially reduces the tax risk to materially acceptable levels.

The Company's approach towards its dealings with HMRC

In line with the Code, the UK Entities ensure an open, cooperative and professional approach in the relationship with HMRC. The Group is commited to:

- Making fair, accurate and timely disclosures in correspondence and returns, and responding to queries and information requests in a timely fashion;
- Seeking to resolve issues with HMRC in a timely manner, and where disagreements arise work with HMRC to resolve issues by agreement where possible;
- Being open and transparent about decision-making, governance and tax planning;
- Structuring transactions in order to give a tax result which is not inconsistent with the economic consequences (unless specific legislation anticipates that result), nor contrary to the intentions of Parliament;
and - Interpret the relevant laws in a reasonable way, and ensure transactions are structured consistently. Where appropriate, we will seek pre transaction clearances from HMRC.

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