PARIS (Reuters) – Canal+ filed an appeal at the start of the year before the Council of State in a dispute opposing the French tax administration, a file whose implications could quantify several hundred million euros for the audiovisual group, Reuters learned from a source close to the file.

Referral to the highest administrative court could be the last possible legal option for Canal+ in order to escape a full rate of 20% VAT on OCS, bought in 2024, while it applied a reduced rate of 10%, from which television benefits, on some of its activities.

The authorities require that the turnover of Canal+ will now be subject to the rate of 20% for all of its income.

Originally a encrypted television channel, Canal+ transformed its economic model to become a content aggregator.

In November 2024, the Paris administrative court of appeal estimated that the 20% rate was “applicable to the entire subscription” to the services of the OCS company, bought in January 2024 by Canal+.

The appeal made before the Council of State disputes this decision.

“Applying a VAT rate of 20%is about 200 million euros in additional costs for Canal+, a group that loses money in France” said Maxime Saada, Chairman of the Manager and CEO of Canal+, before the Senate in January 2025 as part of a hearing on another subject.

The DG had indicated that “most of Canal+ today is the broadcast of linear channels”, that is to say watching television when the program is broadcast.

He also recalled that “when Canal+ offers platforms, from Netflix to Paramount, this portion of turnover is subject to the rate of 20%.”

Tax corrections

Referring to the non-renewal decision of the C8 television channel (Canal+group) by the public authority of the sector (Arcom), the CEO had said that he was unable to absorb shocks like that, neither today nor in the near future “, without using job cuts.

This long -term file started in 2021. In addition to the possible increase in future taxes, the taxman also requests rectifications for certain past periods.

“The French tax authorities are demanding substantial sums from the group as aptly due VAT, which the group disputes” indicated Canal+ in the fall of 2023 in the information document posted upstream of its introduction to the London Stock Exchange.

The producer of films “Paddington” or “Love Phew” specified that the taxman had issued two “rectification proposals” to apply the rate of 20% for the period 2020-2021 and a part of 2019, up to 457.8 million euros and 66.8 million euros respectively.

Contacted by Reuters, Canal+ and the Ministry of the Economy refused to comment.

(Report by Florence Lève, edited by Sophie Louet)

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