LVMH Faces Renewed Tax Scrutiny After Court Loss

Billionaire Bernard Arnault’s LVMH lost the latest round in its court battle against French tax officials who raided the luxury-goods firm’s Paris headquarters to gather evidence for a case.

France’s top court on Wednesday overturned a prior ruling that had deemed the 2019 inspections to be unjustified. The Cour de Cassation ordered the Paris court of appeals to reexamine the challenge brought by LVMH Moet Hennessy Louis Vuitton SE.

Wednesday’s decision revives a probe into suspicions that the firm, controlled by the world’s richest man, may have tried to lower its tax bill by pretending it carried out treasury operations in Belgium rather than France. It’s a boost for French authorities and hints at a low bar for justifying the need to carry out a tax raid.

On Wednesday, the top court ruled that mere presumptions of tax fraud are required to authorise a raid under French law. Contrary to what the court of appeals had stated in its 2020 ruling, judges said there was no need for tax officials to demonstrate that the Belgian unit didn’t have enough staff to carry out its treasury activities.

LVMH said in a statement that the group abides strictly by rules and laws applicable in all the countries where it operates. During a 2020 hearing in the case, an attorney for the company described the evidence-gathering raids as “shockingly disproportionate.”

By Gaspard Sebag

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