VIVENDI UNIVERSAL, the French mobile telecoms to music conglomerate, yesterday won approval from the French Government for tax breaks that will save it up to €3.8 billion (£2.5 billion) in exchange for creating up to 2,100 jobs in depressed regions of France.
France’s Finance Ministry agreed to allow debt-laden Vivendi, which is recovering from an almost ruinous expansion spree, to claim tax credits on €11 billion of historic losses across the company.
The new structure, known as the consolidated global profits tax system, lasts five years and allows Vivendi to count returns from businesses within France and offshore in which it has a 50 per cent or greater economic stake, compared with the previous threshold of 95 per cent.
Vivendi said the change would result in tax savings of €500 million this year and total savings of €3.8 billion over the coming seven years.
Most significant will be the inclusion of results from SFR Cegetel, France’s number two mobile operator, in which Vivendi has a 56 per cent stake and which represents two thirds of group profits. The group will be able to reclaim 56 per cent of taxes paid until it exhausts its credits.
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Vivendi, after winning the new tax status, said it would create two call centres in France with 300 staff in each, and commit tens of millions of euros over several years to creating 1,500 jobs in economically deprived regions.
A Vivendi spokeswoman said its jobs undertaking was made “in parallel” with the change in tax regime, which it requested last December.
The moves come amid reports that Nicolas Sarkozy, Finance Minister, is poised to introduce tax measures to discourage companies from outsourcing jobs and reward them for transferring jobs from abroad back to France.