LVMH CEO Bernard Arnault to pay 22.5 million euros in back taxes

Bernard Arnault, chairman and CEO of the luxury group LVMH, and his wife must pay nearly 22.5 million euros in back taxes. The Administrative Court of Appeal in Paris overturned an earlier ruling that had largely exempted the couple.

Unpaid taxes

The ruling concerns tax assessments for the period from 2010 through 2015. The French tax authorities are claiming 12.96 million euros in additional income tax, social security contributions, surcharges, and late-payment interest for the 2010 tax year. In addition, the couple must pay another 9.5 million euros in wealth tax for the years 2012 through 2015.

The case came to light after the French news agency AFP obtained a copy of the July 2 ruling. For its investigation, the French tax authority used information from Luxembourg and the Bahamas. Arnault, the richest European and one of the richest people in the world, has already announced that he will appeal the decision to the Court of Cassation.

Belgian holding company

According to the investigative media outlet L’Informé, the dispute centers on LVMH’s complex shareholder structure. The Arnault family does not hold its stake in the luxury group directly, but through various holding companies. At the top of that structure is the Belgian company Pilinvest, which, according to the tax authorities, influences the family’s French tax return.

An administrative court in Paris had ruled in late 2020 that Arnault did not have to pay the additional income tax and was entitled to a refund of the wealth tax already paid. The French government appealed that decision and has now been vindicated.

However, the tax setback will have only a limited impact on Arnault’s finances, as he has an estimated net worth of between 123 and 141 billion euros. The tax proceedings are also separate from the activities of the LVMH Group and relate exclusively to the personal tax returns of Bernard Arnault and his wife.