Bernard Arnault, head of the luxury goods group LVMH, has been ordered to pay nearly €22.5 million in back taxes after a Paris appeals court overturned earlier rulings in his favour in a long-running dispute with the tax authorities.
The decision, first reported by the investigative news website L'Informé and seen by AFP, reverses a 2020 judgment that had cleared the LVMH chairman and his wife of the tax assessments and penalties.
According to the ruling, published on 2 July, the couple must pay €12.96 million in additional taxes, social contributions, penalties and interest relating to the 2010 tax year, as well as €9.5 million in wealth tax for the period from 2012 to 2015.
Arnault's representatives said they would challenge the ruling before France's highest administrative court – the Conseil d'Etat.
The case has gone back and forth through the courts for several years. After the Paris administrative court ruled in the Arnaults' favour in 2020, the economy ministry – under then finance minister Bruno Le Maire – appealed twice.
The Paris appeals court initially rejected that appeal, but the Conseil d'Etat later overturned its decision and sent the case back for reconsideration.
Role of holding companies
The Arnaults argue that the tax authorities effectively carried out a full examination of their personal tax affairs without respecting the legal safeguards that apply to such investigations.
The dispute centres around the ownership structure through which the Arnault family controls luxury goods group LVMH.
Rather than holding shares directly, the family's stake is controlled through a series of holding companies, headed by the Belgian company Pilinvest. The court found that Bernard Arnault owned almost all of Pilinvest, valued at €368.4 million.
Part of the dispute concerns a 2010 capital reduction by the Belgian company. The court ruled that €32.18 million of the €49.97 million paid to Arnault and his wife following that transaction should be treated as taxable income.
The investigation also involved requests for assistance from authorities in Luxembourg and the Bahamas.
High-profile tax disputes
Arnault,77, whose LVMH conglomerate includes brands such as Louis Vuitton, Dior and Moet Hennessy, has an estimaed net worth of $165 billion according to the Bloomberg Billionaires Index. That makes him France's richest person and the world's eighth richest.
France scrapped its wealth tax on everything except real estate in 2017, shortly after Emmanuel Macron came to power. Attempts to reintroduce it have failed to get parliamentary approval.
The case is the latest in a series of high-profile tax disputes involving some of France's wealthiest families.
In 2024, members of the Wildenstein family – a French-American dynasty of art dealers, collectors, and horse breeders – were convicted on appeal of tax fraud.
Liliane Bettencourt, the late heiress of L'Oréal, received a tax reassessment exceeding €100 million in 2011 after undeclared bank accounts in Switzerland and Singapore came to light.
(with newswires)
