Bernard Arnault Denounces a Surtax Threatening the Luxury Industry in France

LVMH CEO Bernard Arnault has raised concerns over the corporate tax surtax planned for the 2025 budget, calling it a true “tax on made in France” that, in his view, “encourages offshoring.”

During LVMH’s annual results presentation on Tuesday, January 28, the businessman expressed his concerns about this tax increase, which is expected to generate 8 billion euros for the French government. Specifically, for companies with more than three billion euros in revenue – including LVMH – this surtax would increase the corporate tax rate by approximately 40%.

“An Incentive to Leave France”

Returning from the United States, Bernard Arnault highlighted the stark contrast between the economic environments in the U.S. and France. “In the U.S., corporate taxes are being lowered to 15%, workshops receive subsidies in several states, and President Trump actively supports these initiatives. Meanwhile, in France, we are doing the exact opposite by drastically increasing corporate taxes for companies that manufacture locally. It’s unbelievable! If the goal is to push companies to relocate, this is the perfect way to do it!” he stated.

Although the government insists that this surtax will only be applied for one year, Bernard Arnault remains skeptical. “No one believes that. Once taxes have been raised by 40%, who is going to lower them by 40%?” he said sarcastically.

LVMH Under Pressure After a Turbulent Year

This announcement comes as LVMH faces a challenging 2024, with net profit down 17% to 12.55 billion euros and annual revenue falling by 2% to 84.7 billion euros. “For once, I won’t be talking about a record year,” the CEO admitted.

Given the current climate, Bernard Arnault revealed that U.S. authorities are actively encouraging LVMH to expand its investments in the United States. “Given the current environment, this is an option we are seriously considering,” he acknowledged.

When asked about the possibility of new U.S. tariffs, he remained cautious: “I prefer not to comment and to act discreetly.”

With this surtax, the French government risks weakening one of its industrial flagships. According to Bernard Arnault, this decision could have lasting consequences for the country’s economic appeal.