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France Denies SocGen's 'Rogue Trader' Tax Loss

by Ulrika Lomas, Tax-News.com, Brussels

18 January 2018


The French tax authority has reportedly issued an assessment requiring Societe General to repay a EUR2.2bn (USD3bn) tax credit linked to losses the bank suffered as a result of the activities of rogue trader Jerome Kerviel.

According to a report which appeared in French publication Le Canard Enchaine, Societe General is disputing the assessment, which was served on the bank back in early 2017.

The assessment follows a review of the tax credit received by Societe Generale in the aftermath of the 2008 rogue-trading scandal by the Government towards the end of 2017, when the finance and budget ministries jointly asked the tax authorities "to consider the consequences of this judgment on the tax position of Societe Generale on the results of fiscal year 2008 and to fully safeguard the interests of the state."

The review was launched after an appeals court ruled on September 23, 2016, that the bank was not entitled to claim the full EUR4.9bn it lost as a result of Kerviel's fraudulent trading activities because it was partly culpable for the loss through its own internal control failures. It ordered Kerviel to pay back a sum of EUR1m to Societe Generale.

It is understood that the tax authority's position is based on the argument that the bank was culpable for the loss and is therefore not entitled to claim the tax credit under French law.

TAGS: court | tax | interest | law | budget | tax authority | France | trade

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