Bernard Arnault, the CEO of the LVMH luxury goods group, has been ranked the richest man in France by the magazine Challenges. His fortune is estimated at €22.76 billion.

"/> Bernard Arnault, the CEO of the LVMH luxury goods group, has been ranked the richest man in France by the magazine Challenges. His fortune is estimated at €22.76 billion.

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Luxury goods CEO is richest man in France

Bernard Arnault, the CEO of the LVMH luxury goods group, has been ranked the richest man in France by the magazine Challenges. His fortune is estimated at €22.76 billion.

Published: 6 July 2011 10:32 CEST
Updated: 6 July 2011 14:20 CEST

Luxury goods CEO is richest man in France

Nicolas Genin

Bernard Arnault, the CEO of the LVMH luxury goods group, has been ranked the richest man in France by the magazine Challenges. His fortune is estimated at €22.76 billion.

The canny French businessman, who created the world’s largest luxury products company, retains his position as the wealthiest man in France.

The LVMH group, or LVMH Moët Hennessy – Louis Vuitton S.A., is based in Paris and houses names such as Dom Pérignon, Fendi, Givenchy, Marc Jacobs, Bulgari and many others in its exclusive stable of brands.

According to a 2011 ranking by Forbes magazine, Arnault ranks as the globe’s fourth richest person.

Following Arnault on the French rich list are Gérard Mulliez, founder of the Auchan group (€19 billion), Liliane Bettencourt of L’Oréal (€14.45 billion), and Bertrand Puech of Hermès International (€8.59 billion).

This past year has been a good one for France’s extremely well-off. According to Challenges, the total fortunes of the 500 richest French executives rose by 25 percent in one year, from €194 to €241 billion.

A recent study by Société Générale Private Banking and Forbes showed that the wealth of 67 percent of the rich in France was inherited, whereas 68 percent of the billionaires in the United States and 80 percent in the UK are responsible for their own fortunes.

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Explained: France's exit tax

Like some other European countries, France does have an exit tax for those (French or foreign) who are leaving the country. It’s known by the English name l’Exit tax.

However, it won’t affect most people.

Only those who have been tax resident for a minimum six years of the 10 years immediately before they permanently move out of the country are liable to pay an exit tax – if, that is, they own property, titles or rights worth a minimum of €800,000, or that represent 50 percent of a company’s social profits.

If that affects you, the best advice is to seek expert individual financial advice before moving out of France for good. The relevant page on the French government’s impot.gouv.fr website says it is possible to defer payments, and some relief is available.

Because of the relatively high figures involved, this tax is irrelevant for most people. That said, however, you will still have to inform tax authorities that you are moving out of the country because you may still have income, property and capital gains taxes to pay.

Income tax

You must inform the tax office that you are moving and give them your new address so that your tax declarations can be transferred to your new address.

You are liable for tax on everything you earned in France prior to your departure as well as on any French earnings that are taxable in France under international tax treaties that you earned after your departure.

The year of your departure, you declare your previous year’s earnings as normal – declarations in spring 2024 are for earnings in 2023.

A year later, you will have to declare any earnings taxable in France from January 1st up to the date of your departure, and any French-sourced income taxable source until December 31st of the year of your departure.

If you continue to have any French-sourced income – such as from renting out a French property – you will have to declare that income annually, using the non-residents declaration form.

Property taxes

You will have property taxes to pay if you own a French property on January 1st of any given year – whether it is occupied or not.

Property tax bills come out in the autumn, but they refer to the situation on January 1st of that year, so even if you sell your property you will usually have the pay a final property tax bill the following year.

Moreover, if you receive income from property in France or have rights related to that property (such as shared ownership or stock in property companies), as well as any additional revenue connected to the property, during the year you leave France, you will be required to pay taxes on these earnings.

If any property assets in France exceed €1.3 million on January 1st of a given year, you may also have to pay the wealth tax (IFI).

READ ALSO What is France’s wealth tax and who pays it?

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Capital gains tax

If you sell your French property or share of a French property, you may be liable for capital gains tax at a rate of 19 percent. It will also be subject to social security contributions at the overall rate of 17.2 percent.

Capital gains tax varies depending on how long you have owned the property and whether it was a second home or your main residence.

READ ALSO How much capital gains tax will I have to pay if I sell my French property?

The good news is, if you move to another EU country, or any country that has a specific tax agreement with France, you may be exempt from capital gains tax for non-resident sellers on the sale of a property that was your principal residence in France.

If you move elsewhere, you may be able to claim exemption on capital gains tax up to €150,000. As always, you should seek expert financial advice.

Tell Social Security

Inform social security that you are leaving France permanently – and return your carte vitale if you have one. If you do not, you may be liable for any benefits you receive to which you are no longer entitled.

More mundane tasks involve informing utility and water companies, your internet provider, if you have one, the phone company, your insurance companies, banks – and La Poste, who will be able to forward your mail for up to 12 months, for a fee…

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