Vivendi tax credit deal amounts to jobs in France

26th August 2004, Comments 0 comments

PARIS, Aug 26 (AFP) - Vivendi Universal will create 2,100 jobs over five years as part of a deal agreed with the French government allowing the French media and communications group to book tax credits under a new regime, the finance ministry said Thursday.

PARIS, Aug 26 (AFP) - Vivendi Universal will create 2,100 jobs over five years as part of a deal agreed with the French government allowing the French media and communications group to book tax credits under a new regime, the finance ministry said Thursday.

Under the deal, over three years Vivendi would create at least 1,600 jobs, rising to 2,100 over five years, the ministry said.

"Vivendi has made several commitments to help create jobs in areas of France which are affected by unemployment and industrial restructuring," the ministry said.

As part of the deal Vivendi will set up two call centres through contractors, each with 300 jobs, by end-June 2007, and provide EUR 5 million (USD 6 million) per year over five years to help create 1,500 jobs in selected regions in France, the ministry said.

Sources familiar with the deal, announced by Vivendi earlier, said it would save the company about EUR 500 million per year in tax costs.

Vivendi had been in lengthy talks with the finance ministry over huge tax credits built up by the company under the previous, loss-making administration of ousted chief executive Jean-Marie Messier.

The credits previously could only be claimed against profits of Vivendi subsidiaries owned at least 95 percent by the parent company.

But the company pushed for a regime under which it could pool all its profits and losses in both France and internationally, and apply the tax credits for units in which Vivendi owns at least 50 percent.

Investors welcomed the deal and Vivendi shares were showing a gain of 2.34 percent at EUR 20.95 in high trading volumes by lunchtime while the CAC 40 index of leading French shares rose 0.83 percent to 3,624.94 points.

Vivendi's shares had risen as high as 4.5 percent after it announced it had qualified for the tax regime.

"It's very good news... We're talking about savings of EUR 3.2-4.0 billion over the next five to eight years," said one trader.

© AFP

Subject: French news

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