In a significant turn of events, the French tax authorities have chosen not to pursue legal action against luxury goods giant LVMH over suspected tax evasion, as reported by Mediapart and confirmed by a Bercy source.
This decision follows the French Court of Cassation’s February 2023 ruling, overturning a prior decision that invalidated a 2019 search of LVMH’s premises by tax authorities. The court mandated the return of seized documents and redirected the case to the Paris Court of Appeal.
The DGFiP (Direction Générale des Finances Publiques) has now decided against further proceedings, effectively dismissing tax fraud suspicions. According to a Bercy source, the consideration was whether to conduct another search after the 2023 Court of Cassation ruling. Given the time lapse and the nature of surprise elements in such procedures, it was deemed impractical, with the risk of not locating pertinent documents.
In September 2019, the DNEF (Direction Nationale d’Enquêtes Fiscales) conducted a search at various sites of the French luxury giant, focusing on potential tax evasion involving a Belgian company, LVMH Finance Belgique SA (LFB), now repatriated to France. The 2020 Court of Appeal decision invalidated the initial search, ordering the return of seized documents without allowing the DNEF to retain a copy. The enforceable decision led to the return of documents to LVMH.
In a separate development in 2022, LVMH initiated a «tax partnership» with the tax authorities, fostering dialogue to proactively address potential issues. A Bercy source emphasized the group’s commitment to transparency, submitting potential tax problems associated with future transactions. Notably, this partnership, signed by approximately 70 groups, does not impede tax audits.
Explore the intricacies of this development, as LVMH navigates the complexities of tax scrutiny, and stay informed on the evolving landscape of legal actions and partnerships.
