LVMH Head Office Raids Quashed on ‘Unfounded’ Suspicions
(Bloomberg) -- A French court quashed evidence-gathering raids conducted by tax authorities last year at the Paris headquarters of LVMH Moet Hennessy Louis Vuitton SE.
The Paris court of appeals said that tax officials had obtained a warrant to conduct the searches based on an “unfounded” presumption of fraud. French inspectors were investigating suspicions LVMH was pretending it carried out treasury operations in Belgium to lower its tax bill.
The judges said in a Wednesday ruling that LVMH Finance Belgique appeared to have enough staff to carry out its treasury activities, rebuffing an argument brought forward by French tax officials. The court further said that pointing out that the unit filed no tax returns in France isn’t enough to warrant raids given that it holds accounts in Belgium, where it is based.
Last year’s raids were first revealed at June hearing as LVMH challenged their validity. Delphine Michot, a lawyer for the maker of luxury goods, said at the time that they were “shockingly disproportionate.” She added the Belgian unit has at least six full-time staff and “occupies half a floor in a big tower in Brussels.”
LVMH representatives declined to immediately comment on Wednesday’s ruling.
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