Finance
Orange appeals 312 million euro seizure by French prosecutors in tax dispute
Global Banking & Finance Review®
Company
By Gianluca Lo Nostro
(Reuters) – French telecoms operator Orange said on Friday it had appealed against a 312 million euro ($329.28 million) seizure by the National Financial Prosecutor’s Office in a dispute over VAT.
The French prosecutor’s office is looking into the varying tax rates that the telecoms operator charged for its services between 2017 and 2019.
Orange said in a statement it had appealed the seizure, which was ordered on October 7, and is fully cooperating to determine the scope of the investigation during this preliminary phase.
At the time, Orange and other providers applied different VAT rates depending on the service included in their packages.
Customers were charged a 5% rate for television services, while a 20% tax, the standard rate in France, was applied for telephone services.
Vivendi’s media company Canal+ and telecoms group SFR have also undergone similar investigations concerning VAT rates.
In October, French authorities demanded Canal+ pay 655 million euros, the French newspaper, L’Informé, reported.
Orange said the frozen amounts will be recorded in a specific account on Orange’s balance sheet and will appear as such in its financial statements as of Dec. 31, 2024.
“We’ll change the ratios that are communicated to the market concerning net debt, but our main financial guidance remains unchanged,” an Orange spokesperson told Reuters.
($1 = 0.9475 euros)
(Reporting by Gianluca Lo Nostro, Editing by Louise Heavens and Elaine Hardcastle)
Value Added Tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.
A financial statement is a formal record of the financial activities and position of a business, person, or entity. It includes balance sheets, income statements, and cash flow statements.
Corporate tax is a tax imposed on the income or profit of corporations. It is calculated based on the company's taxable income and is typically paid annually.
A tax dispute arises when a taxpayer and tax authorities disagree on the amount of tax owed, the interpretation of tax laws, or the application of tax regulations.
A seizure in financial terms refers to the legal process by which authorities take possession of assets or funds, often due to unpaid taxes or debts.
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