The tax authorities pin SFR for a record recovery of 420 million euros


Alexander Boero

April 04, 2022 at 5:50 p.m.

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SFR © photofort 77 / Shutterstock.com

© photofort 77 / Shutterstock

The operator SFR suffered a tax adjustment of 420 million euros last year. In total, he owes nearly a billion euros to the French tax authorities.

This is very bad news for Patrick Drahi’s group. SFR, which is criticized by the tax authorities for having applied the reduced VAT on the press between June 2016 and February 2018, received a more than salty note from Bercy. The tax authorities are claiming no less than 420 million euros from the red square operator, who had already suffered a first capital adjustment of an almost similar amount.

SFR, a lower VAT on the press, but customers who still paid the same

While its slate already amounted to 410 million euros for the first adjustments to income tax for the years 2017 to 2019, SFR was again caught up by the patrol. This time, the tax authorities accuse the operator of having fraudulently reduced the VAT on the press between 2017 and 2018.

In detail, the group of Patrick Drahi applied a reduced rate of 2.1% of this VAT on the press in the triple play offers (subscriptions which include Internet, television and fixed telephony) of the operator. Except that if it offered many newspaper packages, these were indeed included in SFR’s triple play offers, subject to higher rates: 20% for telecom services, or 10% in the case of television. paying.

Where SFR frankly caught the eye of the tax authorities (but not necessarily in the way that the operator would have liked) was when they noticed that despite this greatly reduced VAT, the operator was charging always the same price to the customer. In the end, this proved to Bercy that not only did the company not make a gift to its customers, but that it generated a larger turnover excluding taxes, therefore profits. de facto bigger, too.

SFR has succeeded in fundamentally lowering its taxation

The practice that SFR had put in place brought it around 20 million euros each month, as the operator indicates in its 2018 results. In all, therefore, the company pocketed 420 million euros, a sum which should have gone to the tax authorities, and which the latter is now claiming from him, for a total note of 830 million euros.

But beware, SFR is not the only one to have taken part in this little game. Operators Bouygues Telecom and Orange, but also Canal+, would have imitated the company in the red square. Such a practice angered the Ministry of the Economy, which then had it banned from 1er March 2018. Then came the time for tax adjustments.

Whether on VAT on the press or via income tax (after the merger with Numéricable in 2014, SFR deducted the interest on its debt from its taxable profit), the operator has managed to drastically reduce its taxation. In the 2021 income statements, for example, income tax is not considered as an expense, but as an income of 383 million euros, thanks to the use of past losses, as indicated by our colleagues of Capital.

SFR review: what do you need to know before subscribing to an SFR package? Clubic

Founded in 1987, Société Française du Radiotéléphone (SFR) is still the second-largest operator in France in terms of market share in the telecoms sector. Direct competitor of Orange, it offers among the best mobile plans, without commitment, in particular within the framework of bundled offers with an internet box. But there’s no denying the bad publicity surrounding the red-squared operator. So, let’s take stock.
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Source: Capital



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