High tax row as France's richest man seeks Belgian citizenship

Mon, Sep 10, 2012, 01:00

BERNARD ARNAULT, France’s richest man, set off a row over President François Hollande’s plan to introduce a 75 per cent wealth tax when he confirmed he was applying for Belgian citizenship.

Mr Arnault, the chief executive of LVMH, the luxury goods group behind brands such as Louis Vuitton, Dior and Dom Perignon, denied he would become a tax exile, but the opposition seized on the move as proof that the socialist government was driving rich people out of the country.

The revelation that Mr Arnault had recently applied to become Belgian came just days after Mr Hollande insisted he would act on his election pledge to introduce a 75 per cent tax on income over €1 million.

Mr Arnault, a friend of Mr Hollande’s predecessor, Nicolas Sarkozy, is ranked as the world’s fourth-richest man, with a total wealth of $41 billion, according to Forbes magazine. He emigrated to the United States for three years when the socialist François Mitterrand came to power in 1981 and has been critical of the current government’s tax initiative.

Last week the tycoon held talks with Jean-Marc Ayrault, the prime minister, at which the government’s plans to raise taxes on the wealthy were reportedly discussed. “I am and will remain a tax resident in France, and in this regard I will, like all French people, fulfil my tax obligations,” the billionaire said in a statement aimed at quelling the furore yesterday.

Nevertheless, the revelation has led to a heated row over the controversial tax plan, which gave Mr Hollande a bounce in left-wing support during his election campaign last spring but has been sharply attacked on the right.

British prime minister David Cameron annoyed the government when he said he would “roll out the red carpet” for French people fleeing the new tax.

“When you take stupid decisions, you get these troubling results,” said François Fillon, who was prime minister under Mr Sarkozy and a candidate for the leadership of the UMP party. “The head of one of the best businesses in the world, which symbolises French savoir faire and success, known the world over, may be led to change nationality because of the tax policy followed in this country. It is disastrous.”

Mr Arnault has a home in Belgium, and would not need to take Belgian citizenship to declare himself resident there for tax purposes. Some analysts speculated that he may have been sending a warning signal to the government, but he stressed that his application should not be seen as a political gesture. Government minister Benoît Hamon said Mr Arnault’s decision was “not very patriotic”.