France's richest man applies to be Belgian, says not a tax move

PARIS Mon Sep 10, 2012 7:56am EDT

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PARIS (Reuters) - Bernard Arnault, France's richest man and chief executive of luxury group LVMH, said on Saturday he had applied for Belgian nationality, citing personal and business reasons.

Announcing the move a day after French President Francois Hollande said he would press ahead with a new tax on the super rich, Arnault said he would continue to pay taxes in France and keep his French nationality.

Hollande drew a mixed reaction in February when he announced plans for a 75 percent tax on revenue exceeding 1 million euros ($1.26 million) per year as part of efforts to cut France's public deficit to 3 percent of economic output in 2013.

Arnault, who emigrated to the United States during the last Socialist presidency in 1981, has been critical of Hollande's tax initiative, telling Prime Minister Jean-Marc Ayrault on Wednesday he opposed the move.

But he was not becoming Belgian to cut his tax bill, he said.

"Contrary to information published today, Bernard Arnault clarifies that he is and will continue to be a fiscal resident in France. His possible acquisition of Belgian nationality will not change this situation or his determination to develop LVMH and create jobs in France," he said.

Arnault is ranked as the world's fourth richest man with a total wealth of $41 billion, according to Forbes magazine. In a year, he jumped from seventh position, benefiting from his company's rising sales in Asia.

Following newspaper reports on Friday that the government was preparing to water down the February tax pledge, Hollande and cabinet heavyweights said it would go ahead as promised.

"The French are going to be called on to make an effort," Hollande said. "There will be budget savings and solidarity will be necessary, especially from high earners who must contribute more."

British Prime Minister David Cameron triggered a war of words with France at the G20 summit in Mexico in June by vowing to "roll out the red carpet" for French firms if Hollande followed through on his plan to tax the wealthy more.

(Reporting By John Irish; Editing by John Stonestreet)

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Comments (2)
rokid wrote:
“The French are going to be called on to make an effort…” But what about the Belgians?

Sep 10, 2012 9:26am EDT  --  Report as abuse
Bernard Arnault is packing a fiscal parachute. If he decides to leap out of the French plane, with a Belgian passport, he will have all the necessary elements to properly leave the French tax system.If France decides to tax based on citizenship (like the US) then he has another passport in place so he will not be stateless. He can also give up his French passport, so that he will only have a Belgian one and thereby properly have left the French tax regime under the France-Belgian tax treaty. With the French tax system in a high likelihood of hitting him hard, this is just smart self-protection. As for French politicians, as Samuel Johnson famously said, “Patriotism is the last refuge of a scoundrel”. As for those people who say “good riddance”, I would point out to you that a progressive tax system like that of France, the US and the UK has the natural result that the top 1% of tax payers contribute over 30% of the personal tax revenue collected. Therefore, losing a super-contributor like Mr. Arnault would have a huge negative asymmetric impact on tax revenues. Before you call him names (which is not going to inspire him to stay), you may want to think about how you are going to replace the 10s of millions in annual tax revenue he provides.

Sep 11, 2012 3:54pm EDT  --  Report as abuse
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