The French tax authority has decided not to pursue legal proceedings against luxury goods giant LVMH. The tax authority suspected the group of tax evasion, a source in Bercy said on Tuesday, confirming a report from Mediapart.
In February 2023, the Court of Cassation overturned a court decision that invalidated a 2019 search by the tax office at LVMH and ordered the return of the confiscated documents. She had referred the parties back to the appeal court in Paris.
However, the General Directorate of Public Finances (DGFiP) has decided not to pursue the matter, a source in Bercy said, thereby refraining from substantiating its suspicions of tax fraud.
“The question was whether a house search should be carried out again after the 2023 ruling of the Court of Cassation,” the source told AFP. Four years later, this seemed a little pointless as “this type of procedure is only interesting if there is an element of surprise”. There was also a risk that the documents in question would not be found again.
In September 2019, the French tax investigation agency (DNEF) searched several locations of the French luxury goods giant, including the headquarters of LVMH on Avenue Montaigne in Paris, in a case of possible tax evasion.
The tax authority wanted to look into the role of a Belgian company, LVMH Finance Belgique SA (LFB), a central financial administration that has since been moved back to France.
The appeals court had declared the search invalid in 2020 and ordered the confiscated documents to be returned, without the authority being allowed to keep a copy of them. Since the appeal court’s decision was enforceable, the documents were handed over to LVMH.
Meanwhile, unrelated to this affair, LVMH entered into a “tax partnership” with the tax administration in 2022, the aim of which is to “try to defuse in advance issues that could appear problematic” by establishing a dialogue between the parties. , said the same source in Bercy.
“This shows the good will of the group to be more transparent and to present to us possible tax difficulties related to future transactions,” she added, emphasizing that this type of partnership, which she said has already been subscribed by about 70 groups, not hinder possible tax audits.
LVMH did not immediately respond to AFP’s request for comment. (AFP)
This translated article previously appeared on FashionUnited.fr