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Kingfisher wins £145m French tax case

Published: 10 July 2013
B&Q owner Kingfisher has finally triumphed in a French court over a decade-old tax quarrel worth £145m to the company.
Kingfisher wins £145m French tax case
The case dates back to 2003, the time of the demerger of Kesa Electricals from Kingfisher. Kingfisher paid a one-off tax charge to the French government, triggered by the demerger, while waiting for clarification of the technical position. As a result, an exceptional tax charge was recognised against the company's earnings for its 2003/4 financial year.

Kingfisher subsequently appealed the decision through the French courts and in 2009 successfully obtained a full cash refund of the tax paid, plus a repayment supplement, amounting to €169m in total.

However, the case was then referred to France's ultimate court, the Conseil d'Etat, by the French government and so, pending this final decision, the associated exceptional credit has not been recognised in Kingfisher's earnings to date.

Now, the court has found in Kingfisher's favour, but there will be no impact on the company's cash position because of the 2009 refund. Nevertheless, Kingfisher says the decision finally removes any uncertainty over the position and will mean an exceptional credit of around £145m being recognised in its earnings this year.

The court's ruling could result in dividend benefits for Kingfisher's shareholders next year, CEO Ian Cheshire having said in the past that payments would depend on the outcome of the French case.

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