EU Commission looks overVivendi's new tax credits

27th August 2004, Comments 0 comments

BRUSSELS, Aug 27 (AFP) - The European Commission said Friday it was in contact with French authorities to make sure that a special tax regime granted to French media and communications group Vivendi Universal is not discretionary.

BRUSSELS, Aug 27 (AFP) - The European Commission said Friday it was in contact with French authorities to make sure that a special tax regime granted to French media and communications group Vivendi Universal is not discretionary.

Tilman Lueder, spokesman for Competition Commissioner Mario Monti, said the commission, the European Union's executive arm, was seeking to find out if any discretion was applied when determining which companies may benefit from the regime.

He said that as long as all companies were given fair and equal treatment then the regime is not anti-competitive.

Vivendi announced Thursday that it had reached a much-awaited accord on tax credits with the French finance ministry, agreeing to create new jobs in return for access to a tax regime that will save the group about EUR 500 million (USD 605 million) per year.

Under the special regime allowed under the French tax code, companies may offset profits from one subsidiary with losses in another subsidiary in another country, meaning the company only pays tax on the global profit rather than national profit. Profits in France could be totally offset by losses in another country and the company could even end up with a tax credit.

Lueder said: "We are aware of this of this fiscal system in France. This is a special provision in the French tax code. It is open to all companies who are internationally oriented."

The regime was instituted in France in 1965 to stimulate the internationalisation of French companies.

Lueder said that the regime was used in particular by oil companies that have numerous subsidiaries abroad.

© AFP

Subject: French news

0 Comments To This Article