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French tycoon's threat to become Belgian shakes tax plan

By Thomas Adamson

Associated Press

Published: Monday, Sept. 10 2012 11:32 p.m. MDT

In this Feb. 5, 2009 file photo, Bernard Arnault. Chairman and CEO of LVMH Moet Hennessy Louis Vuitton, the Paris-based luxury goods empire, presents the group's 2008 results in Paris. La Libre Belgique newspaper reported Saturday Sept.8, 2012 that Arnault's citizenship application was confirmed by the head of Belgium's naturalization office. French media drew a connection to French President Francois Hollande's plan to raise the tax rate on France's highest earners to 75 percent.

Associated Press

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PARIS — Bernard Arnault — the richest man in Europe — has ignited an uproar in France over taxes, citizenship, patriotism and what policies the government needs to promote growth.

It's a pretty impressive achievement for one little statement.

Arnault — the CEO of French fashion giant LVMH, owner of houses like Louis Vuitton and Christian Dior — is the symbol of France's treasured luxury fashion industry.

So when the face of "Made in France" confirmed Sunday that he had applied for dual citizenship in Belgium, it struck deep chord in France's national pride.

Despite his protests, many thought it was an attempt to dodge the new Socialist government's planned 75 percent tax on the country's wealthiest.

One French paper's front-page headline called him a "rich jerk" on Monday, and French President Francois Hollande questioned Arnault's patriotism.

But beyond the name-calling, the debacle highlighted a very French contradiction: A country that prides itself on producing exorbitantly-priced luxury fashion has tax policies that target the very people rich enough to buy French goods.

Arnault is the world's fourth-richest man, whose personal fortune Forbes magazine estimates at $41 billion.

His application to Belgium comes as Hollande prepares to implement a 75 percent tax on those that earn more than $1.28 million a year — although it was hinted the plan could be watered down.

"If I was in his shoes I might also think that I don't have a choice and would leave," said 34-year-old Jean-Baptiste Lete, a Paris resident walking in the city Monday.

It wouldn't be the first time that Arnault dodged a Socialist named Francois. He emigrated to the U.S. in 1981 when President Francois Mitterrand swept to power — and returned when the country's tax policies became more conservative.

As a Belgian, Arnault would pay a maximum of 50 percent on his income. More appealingly, he could take advantage of the cherished tax-free status that Belgians hold in Monaco — provided he renounced his French nationality. French nationals living in Monaco are taxed in France.

Arnault vociferously denied that his decision had anything to do with tax evasion and said he will continue paying French taxes, but his comments convinced few.

"I can't believe it," businessman Bernard Tapie was quoted as saying in the Le Parisien paper. "When you're the citizen of a country, you need to know how to enjoy the good part but also accept the downsides. Symbolically, this is a catastrophe."

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