France Telecom, the country’s state-owned telecommunications provider, may soon be forced to pay up to EUR1 billion in back taxes to the French government following an 18 month investigation into illegal subsidies by the European Commission.
According to the Financial Times, the EU’s executive body believes that the firm received around EUR1 billion in subsidies during the period between 1994 and 2003 because of favourable rates and thresholds for the taxe professionnelle business levy.
France Telecom is disputing the Commission’s claim and commented through a spokesman that “there’s nothing to be paid” by the company, and that redress will be sought at the European Court of Justice if necessary.
However, it has also been reported that Brussels is to postpone another more sensitive part of the investigation to establish whether comments made by the former French Finance Minister Francis Mer effectively amounted to state aid.
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