Tax fraud: the tax authorities abandon legal proceedings against LVMH

The French tax authorities have given up on continuing legal proceedings against the luxury giant LVMH, which it suspects of tax fraud, we learned on Tuesday from a source in Bercy, confirming information from Mediapart. In February 2023, the Court of Cassation annulled a court decision which invalidated a tax search at LVMH in 2019 and ordered the return of the seized documents. She referred the parties to the Paris Court of Appeal. The General Directorate of Public Finances (DGFiP), however, decided not to pursue the matter, indicated a source at Bercy, thus refusing to substantiate its suspicions of tax fraud. “The question was whether it was necessary to repeat a search after the judgment of the Court of Cassation in 2023,” she explained to AFP. “It seemed a little vain to us” four years later, because “this type of procedure is only of interest if there is an element of surprise” and “we risked not finding the documents” concerned, a- she added.

The National Tax Investigation Department (DNEF) carried out a search in September 2019 on several sites of the French luxury giant, including the LVMH headquarters, avenue Montaigne in Paris. The tax authorities wanted to look into the role of a Belgian company, LVMH Finance Belgique SA (LFB), a treasury center since repatriated to France. The court of appeal invalidated this search in 2020 and ordered the return of the seized documents without the possibility for the DNEF to keep a copy.

The decision of the court of appeal being enforceable, the documents were handed over to LVMH. In the meantime, unrelated to this affair, LVMH concluded in 2022 with the tax administration a “tax partnership” whose aim, by establishing a dialogue between the parties, is “to try to clear up in advance subjects which could appear to be problematic,” according to the same source at Bercy.

“This reflects the group's good will to be more transparent and submit to us any possible tax difficulties linked to future operations,” she added while emphasizing that this type of partnership, already subscribed to by around 70 groups according to her , did not hinder possible tax audits. Contacted by AFP, LVMH did not immediately react.