After throwing their super-glamorous annual party in Cannes last week, the Italian fashion design duo Domenico Dolce and Stefano Gabbana came back down to earth with a bump when the couple learned that they could face a whopping $1.12b (£698m) fine for alleged tax evasion.

Following an investigation, Italian authorities have urged the country's fiscal agency to charge the designers with tax evasion and abuse of rights, in relation to the sale of the Dolce & Gabbana and D&G brands to the couple's Luxembourg-based holding company Gado Srl in 2004.

However, the pair strenuously deny any wrongdoing. "It's a paradox! Since when does one have to pay taxes on money one never actually collected?" the designers said in a personal statement. "It's an absurd demand based on a completely abstract calculation. This higher taxable sum... is a virtual figure we have never received, the result of a theoretical accounting exercise."

It's not the first time a high profile fashion designer has been in trouble with the tax man. Back in January, Valentino Garavani and his business partner Giancarlo Giammetti were fined 33m euros (approximately £30m) by Italian authorities for suspected tax evasion.

Picture: Domenico Dolce and Stefano Gabbana attend their Fabulous in Cannes party.