The European
Commission ordered France on Wednesday to recover 1.37 billion euros
($1.50 billion) from EDF because of a tax exemption granted to the
country's main provider of electricity in 1997.
The
Commission said that the tax exemption of 889 million euros gave EDF,
in which the French state has an 84.5 percent stake, an undue economic
advantage. Interest, which will be calculated in cooperation with
France, is put at 488 million euros.
The
Commission originally took a similar decision in 2003, but its decision
was annulled in a case confirmed by the European Court of Justice in
2012 because the Commission had not checked whether a private investor
would have invested a comparable amount under similar circumstances.
As EDF was awarded
the high-voltage transmissions network in France as a concession, it
made accounting provisions between 1987 and 1996 with a view to renewing
the network. In 1997, when the company's balance sheet was
restructured, the French authorities reclassified some of the provisions
as a capital injection, without levying corporation tax.
Shares in EDF dropped sharply and were trading more than 2 percent lower at 20.99 euros.
(Reuters)