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France's richest man drops controversial bid for Belgian citizenship

April 11, 2013|By Kim Willsher

PARIS -- France's richest man, Bernard Arnault, the billionaire head of luxury goods group Louis Vuitton Moët Hennessy, has withdrawn his application for Belgian citizenship amid criticism that he was seeking to escape French taxes.

The 64-year-old tycoon insisted in a newspaper interview that he never intended to avoid the French taxman or President François Hollande's proposed 75% "supertax" rate. Instead, he said, he wanted to save his family business empire from being torn apart if his five children from two marriages fell out after his death.

A public furor erupted in France and Belgium last year after Arnault's request for Belgian nationality became public. Inheritance tax in Belgium is only 3% compared with 11% in France, and Belgium has no wealth tax, unlike France.

In an interview Wednesday with Le Monde newspaper, the businessman said he had been "misunderstood" and was upset by the controversy, which saw the center-left newspaper Libération run a front-page photo of Arnault with a suitcase and the headline: "Casse-toi riche con" (Get lost, rich jerk).

Arnault, declared by Forbes magazine as the 10th richest person in the world, with a fortune of $29 billion, told the paper he had "underestimated the impact" of his request for Belgian citizenship and said the backlash it provoked had been "not very nice."

"I was assured it would be done with the greatest discretion....I explained several times that I would remain resident in France and pay my taxes here. In vain. The message never got across. Today, I wish to be unequivocal: I withdraw my request for Belgian nationality," he said. "I thought the controversy would calm down, but the rumors didn't stop."

Arnault said his LVMH group paid almost a billion euros ($1.3 billion) in company taxes in France, even though 90% of its profit came from abroad, which he described as "exemplary behavior."

"I'm not going to say what I pay in personal taxes, but believe me, it's a substantial amount," Arnault added. He dismissed suggestions that he had given up seeking Belgian citizenship because he was unlikely to get it. His request had been turned down by Belgian nationality authorities, but the final decision rested with the government in Brussels.

"I think I had a very good chance of obtaining it," Arnault told Le Monde.

"Given the situation in the country [France], the effort to get things back on their feet must be shared," Arnault said. "With this gesture I want to show my attachment to France and my confidence in the country's future."

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