PARIS: LVMH CEO Bernard Arnault has taken aim at the French government’s planned corporate tax hike, warning that companies could shift operations to the U.S. to escape rising levies.
Returning from the U.S., where he saw “a wind of optimism,” Arnault likened coming back to France to “a cold shower.”
At an LVMH earnings presentation, he blasted the government’s plan to raise corporate taxes to over 40 per cent, calling it “a tax made in France” that could drive businesses abroad.
“If you wanted them to relocate, this would be the ideal way to do it,” he said, noting that U.S. corporate taxes will drop to 15 per cent. LVMH, which reported a 17 per cent dip in net profit for 2024, expects the tax hike to cost the company up to €800 million.
The proposed levy, a holdover from the previous administration, aims to raise €8 billion and affects 440 firms with over €1 billion in revenue. Finance Minister Eric Lombard insists it will be temporary, but Arnault scoffed, “Nobody believes that. Once taxes hit 40 per cent, who will lower them again?”
Business leaders, including Medef employers’ federation chief Patrick Martin, back Arnault’s concerns. “There is growing anger,” Martin said, adding that while some companies can invest abroad, “those who can’t are trapped.”
The government remains unmoved. “Everybody must do their bit,” said spokeswoman Sophie Primas.
Meanwhile, Finance Commission President Eric Coquerel accused Arnault of promoting far-right views by citing Elon Musk as an inspiration for slashing French bureaucracy.
The tax hike is part of a broader plan to cut France’s public deficit to 5.4 per cent this year, amid pressure from the EU to rein in spending. — AFP
