ROME - An Italian prosecutor on Wednesday sought a sentence of two years and six months for fashion duo Domenico Dolce and Stefano Gabbana, who are on trial in Milan for allegedly evading about a billion euros (S$1.6 billion) in taxes.

The two are accused of dodging taxes due to the state by managing their brands through a shell company "Gado" in Luxembourg in 2004 and 2005.

"They are the ones who profited most from the operation," prosecutor Gaetano Ruta was quoted by the Italian news agency ANSA as saying.

"Gado was an artificial construction made for the tax advantage that was obtained," he said.

Dolce and Gabbana, whose clients include Beyonce and Madonna, have repeatedly denied the charge.

The two designers are being tried with five other people in the case. The investigation began after a tax inspection in 2007 and was completed in 2010.