EU orders France's EDF to repay huge tax break of $1.5 billion
"The European Commission has decided that Electricite de France (EDF), the main electricity provider in France, has been granted tax breaks incompatible with EU rules on State aid," the European Union's executive body said in a statement.
The case has wormed its way through the EU court and regulatory system since 2003 and the decision by the EU sent EDF's shares plunging by 2.8 percent in afternoon trading on the Paris stock exchange.
EDF is now an international player in providing electricity, relying on France's 58 nuclear reactors, as well as developing new plants, notably the controversial Hinkley Point project in Britain.
"The Commission's investigation confirmed that EDF received an individual, unjustified tax exemption which gave it an advantage to the detriment of its competitors, in breach of EU State aid rules," EU Competition Commissioner Margrethe Vestager said in a statement.
At heart of the ruling is a 1997 decision by French tax authorities to exempt EDF from a decade's worth of corporation tax on investments in France's high-voltage transmission network.
The Commission said this tax break, nominally available to any company, was unjustified as no private company would have made the same, highly unprofitable investment, AFP reported. ■