LVMH: billionaire Bernard Arnault under scrutiny by the French tax authorities
Tax assessment of nearly 22.5 million euros. The chain of control leading to LVMH is under scrutiny – Appeal to the Council of State
As if the sharp slowdown in the luxury sector were not enough, a suspected case of tax evasion has put Bernard Arnault in the crosshairs of the French tax authorities. The head of luxury giant LVMH is facing a tax assessment of nearly 22.5 million euros, according to a ruling by the Paris Administrative Court of Appeal, as reported by AFP. Arnault and his wife – the agency points out – can still lodge an appeal with the Council of State.
Specifically, the Court ordered the couple to pay €12.96 million in income tax and social security contributions for 2010, and €9.5 million in wealth solidarity tax for the period 2012–2015.
The Holding Waterfall
At the heart of the matter lies LVMH’s “complex shareholding structure”, according to the news website L’Informé, which revealed the administrative court’s decision. “The Arnault family does not hold a direct stake in the luxury group’s capital, but rather through a cascade of holding companies.”
The website points out that, “at the top of this pyramid is a Belgian company, Pilinvest”, which enables France’s wealthiest individual to reduce their tax liability.
Decision contested by Arnault
Arnault has contested the decision of the Paris Administrative Court and announced his intention to appeal to the Council of State. “This decision, which overturns the ruling at first instance and even the one previously handed down by this very court, will be the subject of an appeal to the Council of State,” a spokesperson for Arnault told AFP. Specifically, according to the ruling, Arnault and his wife are “liable for” 12.96 million in additional income tax and social security contributions for 2010, and 9.5 million euros in solidarity tax on wealth between 2012 and 2015.
