French tax authorities to reimburse €235,000 to LVMH

French tax authorities claimed additional income tax from LVMH following an audit of its subsidiary Berluti but, after a legal battle that lasted several years, they will have to repay the world’s number one luxury group a minimum of €235,000, according to a ruling by the Versailles Administrative Court of Appeal.

“The Ministry for the economy, finance and industrial and digital sovereignty is directed to proceed, within two months, to the payment of the principal sum of €235,852.77,” stated the ruling, which was gleaned on Wednesday by the AFP agency, confirming a report by the Informé site.

The sum “includes the interest that has accrued since April 29 2013, and which will continue to accrue until the reimbursement is complete,” stated the Versailles Administrative Court of Appeal.

LVMH “has calculated the default interest at €32,074.65 as of April 30 2022, a figure that will need to be adjusted until the full payment of the amount due,” added the court.

Following a tax audit of Berluti in 2015, the R&D tax credit claimed by the men's luxury footwear label, owned by LVMH since 1993, “was challenged by the administration for the years 2008 and 2010, and additional corporate income tax payments were as a result claimed from the LVMH group,” the court indicated in its ruling.

France’s Directorate General of Public Finance (DGFIP) asked LVMH to pay more than €2 million in additional tax, according to the Informé site.

A legal battle ensued, focused especially on Berluti's made-to measure and ready-to-wear footwear business, which ended with the court ruling of February 29.

Neither LVMH nor DGFIP have responded to AFP's requests for comments.

In 2023, LVMH reported a revenue of €86.2 billion, and a net profit of €15.2 billion.