EU orders France's EDF to pay back 1997 tax break
The European Union has ordered French electricity giant EDF to repay 1.37 billion euros of tax breaks granted in 1997. The company's shares plunged 2.8 per cent after the decision was announced on Wednesday.
The exemption from a a decade's worth of corporation tax on investments in France's high-voltage transmission network was "incompatible with EU rules on state aid", the European Commission said in a statement.
EDF, which is 85 per cent state-owned now, was entirely public property at the time.
The exemption was unfair because no private company would have made such an unprofitable investment, the Commission argued.
"It is therefore state aid that has strengthened EDF's position to the detriment of its competitors, without furthering any objective of common interest," the Commission said.
The case has been making its way through the EU's court and regulatory system since 1997.
EDF said it "took note" of the EU's decision and would "proceed to repay the indicated sums", warning they would have a negative effect on its financial results this year.
It said it would probably ask for the cancellation of the ruling.
Economy Minister Emmanuel Macron said that Wednesday's ruling will not undermine the company's finances.
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