Tax authorities in France have announced that they will not pursue legal action against luxury goods giant LVMH over allegations of tax evasion. This decision comes after the French Court of Cassation overturned a previous ruling that invalidated a search of LVMH’s premises in 2019. The court ruling mandated the return of the seized documents and referred the case back to the Paris Court of Appeal. However, the Direction Générale des Finances Publiques (DGFiP), the French tax authority, has opted to drop the case, citing the futility of carrying out another search four years later and the risk of not finding relevant evidence.
The investigation initially began in September 2019 when the Direction Nationale d’Enquêtes Fiscales (DNEF) conducted a search at various locations of LVMH, including its headquarters in Paris. This search was connected to a potential case of tax evasion involving LVMH Finance Belgique SA (LFB), a Belgian company. The DNEF sought to examine the role of LFB, which was subsequently brought back to France. However, in 2020, the Court of Appeal invalidated the search and ordered the return of the seized documents without allowing the DNEF to retain a copy. Consequently, the documents were returned to LVMH.
It is worth noting that in 2022, LVMH entered into a “tax partnership” with the tax authorities with the aim of promoting communication and proactively addressing any potential tax issues. The source at Bercy, a colloquial term used to refer to the French Ministry of Economy and Finance, emphasizes that this partnership does not impede tax audits and underscores LVMH’s dedication to transparency.
In conclusion, the decision by French tax authorities to drop the legal case against LVMH marks the conclusion of the investigation into alleged tax evasion. The implications of this development for LVMH and its reputation in the luxury goods industry remain to be seen.
Useful links:
1. LVMH Policy on Ethics and Compliance
2. DGFiP Partnership with Industrial Actors
