SFR sees red. The tax authorities last year notified 420 million euros of new tax adjustments to the operator, reports Capital. This sum relates to the tax on the profits of the company from 2018 to 2019, in particular on the VAT for the years 2017 and 2018. The bill is getting heavier, because SFR owes a total of 830 million euros to the State .
Bercy criticizes SFR for having applied for several years the reduced VAT on the press for some of its offers triple play. By playing with the tax rules, the operator only imposed a VAT rate of 2.1% for the sale of certain telecom services, against the 20% required by the State. A great way to save money.
To take advantage of this advantageous reduction, SFR used SFR Presse, a paid online kiosk allowing you to read many press titles (including a large part owned by Altice). The service had been integrated into certain packages, often free of charge for the customer: billed at €20, the option was generally accompanied by an equivalent discount. This sleight of hand drastically reduced the operator’s VAT costs, which made more profit on its offers without the price changing for the customer.
According to SFR’s annual results, this strategy allowed it to save around 20 million euros per month, and 420 million euros in all during the 21 months of use of this optimization. Bouygues Telecom and Orange had followed suit. Finally, a VAT reform was introduced in 2018 in order to turn off the tap, and the State is now looking into the tax adjustments for the years 2016 to 2018.