A tax optimization of 800 million euros for General Electric in France

A tax optimization of 800 million euros for General Electric in France
Written by madishthestylebar

US industrial giant General Electric (GE) resorted to tax optimization in France between 2015 and 2020, allowing it to transfer up to 800 million euros of profit abroad, according to information published on Sunday May 29, by the investigative site Disclose.

These practices concern the French gas turbine entity of GE in Belfort, where he was sued by employees in December 2021 who precisely denounced his tax optimization scheme. These employees had filed a complaint for “fraud on the right to employee participation”.

Read also Article reserved for our subscribers General Electric: the end of a conglomerate

Since the takeover of the Belfort turbine plant from Alstom in 2015, the American multinational would have caused 800 million euros in profits to escape to Switzerland and the American state of Delaware, i.e. a shortfall of between 150 and 300 million. for the French tax authorities, according to the balance sheets of the factory and the audits consulted by Disclose.

According to this financial package, the Belfort plant was a “contract manufacturing unit” Where ” service provider “ of GE’s Swiss subsidiaries, which handle the sales and make most of the profits. The power plant turbine factory also paid royalties to its US parent company for the use of its brand and technologies.

Read also: Article reserved for our subscribers Tax evasion: “Multinationals will be able to continue their arrangements in complete opacity to escape tax”

No tax audit

Bercy would have previously validated the tax scheme, according to a protocol of ” trust “ with the tax administration, specifies Disclose. According to this procedure set up by the Ministry of Finance in 2013 with a handful of companies, including GE, the company prepares its tax plan upstream with the tax authorities, which undertakes not to launch an audit.

“GE respects the tax rules of the countries in which the company operates”replied, Sunday, a spokesperson for the industrialist. “All companies that operate and manufacture in multiple countries have a transfer pricing policy to ensure that all inter-company transactions are at an arm’s length price. [c’est-à-dire à des prix qui s’appliqueraient aux transactions entre parties non liées] »he continued.

In their summons filed in December 2021, the Sud Industrie union and the Social and Economic Committee (CSE) of GE accused the company of having reduced the tax result of the Belfort gas turbines entity (GE EPF) by the transfer of wealth to subsidiaries abroad, where taxation is more advantageous. They are calling for a catch-up in participation over the period 2015-2020.

The CSE estimated at around one billion euros the amount of profits located in tax havens to the detriment of GE EPF in recent years. EDF has since announced the purchase of part of the site’s activities for 1.2 billion dollars.

Read also Article reserved for our subscribers The takeover by EDF of the nuclear activity of General Electric is becoming clearer

The World with AFP

#tax #optimization #million #euros #General #Electric #France

About the author


Leave a Comment