The change in this caption in 2021 can be analysed as follows:
| € millions | 31.12.2019 | 31.12.2020 | Charges(2) | Reversals (used)(2) | Reversals (not used)(2) | Other(1) | 31.12.2021 |
|---|---|---|---|---|---|---|---|
| Provisions for restructuring | Provisions for restructuring 31.12.2019113.0 |
Provisions for restructuring 31.12.2020235.1 |
Provisions for restructuring Charges(2)130.5 |
Provisions for restructuring Reversals (used)(2)-145.2 |
Provisions for restructuring Reversals (not used)(2)-45.4 |
Provisions for restructuring Other(1)7.5 |
Provisions for restructuring 31.12.2021182.5 |
| Provisions for product returns | Provisions for product returns 31.12.2019351.1 |
Provisions for product returns 31.12.2020352.4 |
Provisions for product returns Charges(2)422.9 |
Provisions for product returns Reversals (used)(2)-305.4 |
Provisions for product returns Reversals (not used)(2)-84.5 |
Provisions for product returns Other(1)20.4 |
Provisions for product returns 31.12.2021405.9 |
| Other provisions for liabilities and charges | Other provisions for liabilities and charges 31.12.2019710.7 |
Other provisions for liabilities and charges 31.12.2020694.1 |
Other provisions for liabilities and charges Charges(2)216.2 |
Other provisions for liabilities and charges Reversals (used)(2)-97.7 |
Other provisions for liabilities and charges Reversals (not used)(2)-117.7 |
Other provisions for liabilities and charges Other(1)3.8 |
Other provisions for liabilities and charges 31.12.2021698.7 |
| TOTAL | TOTAL31.12.20191,174.7 | TOTAL31.12.20201,281.6 | TOTALCharges(2)769.6 | TOTALReversals (used)(2)-548.3 | TOTALReversals (not used)(2)-247.6 | TOTALOther(1)31.7 | TOTAL31.12.20211,287.1 |
| € millions | Charges | Reversals (used) | Reversals (not used) |
|---|---|---|---|
| Operating profit | Operating profit Charges639.1 |
Operating profit Reversals (used)-417.1 |
Operating profit Reversals (not used)-155.8 |
| Other income and expenses | Other income and expenses Charges130.5 |
Other income and expenses Reversals (used)-131.2 |
Other income and expenses Reversals (not used)-91.8 |
| Net financial income | Net financial income Charges— |
Net financial income Reversals (used)— |
Net financial income Reversals (not used)— |
The change in this caption in 2020 can be analysed as follows:
| € millions | 31.12.2018 | 31.12.2019 | Charges(2) | Reversals (used)(2) | Reversals (not used)(2) | Other(1) | 31.12.2020 |
|---|---|---|---|---|---|---|---|
| Provisions for restructuring | Provisions for restructuring 31.12.2018102.1 |
Provisions for restructuring 31.12.2019112.9 |
Provisions for restructuring Charges(2)261.9 |
Provisions for restructuring Reversals (used)(2)-110.9 |
Provisions for restructuring Reversals (not used)(2)-15.7 |
Provisions for restructuring Other(1)-13.1 |
Provisions for restructuring 31.12.2020235.1 |
| Provisions for product returns | Provisions for product returns 31.12.2018316.8 |
Provisions for product returns 31.12.2019351.1 |
Provisions for product returns Charges(2)300.4 |
Provisions for product returns Reversals (used)(2)-227.0 |
Provisions for product returns Reversals (not used)(2)-49.4 |
Provisions for product returns Other(1)-22.7 |
Provisions for product returns 31.12.2020352.4 |
| Other provisions for liabilities and charges | Other provisions for liabilities and charges 31.12.2018608.5 |
Other provisions for liabilities and charges 31.12.2019710.7 |
Other provisions for liabilities and charges Charges(2)219.0 |
Other provisions for liabilities and charges Reversals (used)(2)-133.8 |
Other provisions for liabilities and charges Reversals (not used)(2)-58.8 |
Other provisions for liabilities and charges Other(1)-43.0 |
Other provisions for liabilities and charges 31.12.2020694.1 |
| TOTAL | TOTAL31.12.20181,027.4 | TOTAL31.12.20191,174.7 | TOTALCharges(2)781.3 | TOTALReversals (used)(2)-471.7 | TOTALReversals (not used)(2)-123.9 | TOTALOther(1)-78.8 | TOTAL31.12.20201,281.6 |
| € millions | Charges | Reversals (used) | Reversals (not used) |
|---|---|---|---|
| Operating profit | Operating profit Charges498.8 |
Operating profit Reversals (used)-357.6 |
Operating profit Reversals (not used)-108.1 |
| Other income and expenses | Other income and expenses Charges282.5 |
Other income and expenses Reversals (used)-114.1 |
Other income and expenses Reversals (not used)-15.8 |
| Net financial income | Net financial income Charges— |
Net financial income Reversals (used)— |
Net financial income Reversals (not used)— |
L’Oréal is party to several material disputes, described below:
In January 2015, decree 8.393/2015 stated that commercial companies in Brazil would be liable for the indirect IPI tax on certain products as from 1 May 2015. L’Oréal is challenging the legal grounds of this decree and its application. In light of changes in market practices and a favourable change in the opinion of its advisers, since 1 January 2018 L’Oréal has recognised the IPI collected under income.
L’Oréal received tax reassessment notices regarding the indirect IPI tax for financial years 2008 and 2011 to 2015 totalling €631 million, including interest and penalties. The Brazilian tax authorities are questioning the ex-works sales price to the commercial arm used to calculate the IPI tax base. After consulting with its tax advisors, L’Oréal considers that the Brazilian tax authorities’ position is unfounded and has challenged these notices. L’Oréal continues its legal proceedings with the tax and legal authorities.
In light of the negative developments in administrative court decisions on the same matter for other Brazilian groups,L’Oréal funded a provision for €42 million to partially cover this risk.
L’Oréal received several tax reassessment notices regarding financial years 2007/08 to 2017/18 and 2019/20 for the most part concerning the tax deductibility of advertising, marketing and promotional expenses for a total amount of €204 million including interest and penalties. After consulting with its tax advisors, L’Oréal decided to contest these notices and continues the legal proceedings with the administrative and legal authorities.
Mutual agreement procedures were instigated vis-à-vis the Italian, French, Indonesian and Singaporean tax authorities in order to eliminate double taxation following disagreements between these authorities.
