2023 universal registration document

5. 2023 Consolidated Financial Statements

Valuation of provisions for tax risks and uncertain tax positions

See Notes 6 “Income taxes“ and 12 “Provisions for risks and expenses – Contingent liabilities and significant outstanding litigation”, to the consolidated financial statements

Risk identified Our response
Risk identified

Your Group is exposed to various business risks, including tax risks.

When the amount or maturity can be assessed with sufficient reliability, a tax liability is recognized for these risks. Otherwise, your Group discloses information on contingent liabilities in the notes to the consolidated financial statements.

Note 12.2.1 "Tax disputes" sets out, in particular, the current tax disputes in Brazil and in India, for which the administration's claims amount to M€ 711 and M€ 213, respectively.

The uncertain tax positions are classified in the balance sheet on the non-current tax liabilities line for M€ 256 as at December 31, 2023.

The identification and valuation of these items are considered to be a key audit matter, given:

  • the high level of judgment required of Management to determine the risks which need to be provisioned, and to valuate the amounts to be provisioned with sufficient reliability;
  • the potential significant impact of these provisions on your Group's income.
 Our response

In order to identify and obtain an understanding of all uncertain tax positions, existing liabilities and related judgments, we had discussions with tax departments at different levels of the organization, in France and abroad.

We obtained an understanding of the internal control system put in place to identify and assess these risks. We reconciled the list of identified tax disputes with the information provided by your Group’s tax departments and the main tax advisors.

As for the main uncertain tax positions and tax risks for which a liability is made, we assessed the quality of Management's estimates by considering the data and assumptions used, as well as the calculations made.

We also conducted a retrospective analysis by comparing the amounts paid over the last few years with the amounts previously provisioned. By including tax experts into our team when necessary, we:

  • examined procedural matters and/or tax or technical opinions issued by external advisors selected by Management, in order to assess the appropriateness of a liability;
  • carried out, on the basis of the information submitted to us, a critical review of the risk estimates, and verified that the assessments used by Management are within these acceptable ranges;
  • verified the continuation of the methods used for these assessments, when necessary.

With regards to contingent liabilities, by including tax experts when necessary, we examined the procedural items and/or the tax or technical opinions issued by external advisors chosen by Management in order to assess the appropriateness of a lack of provision.

We assessed the appropriateness of the information given in the notes to the consolidated financial statements
Specific Verifications

We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations of the information relating to the Group given in the Board of Directors’ management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.

We attest that the consolidated non-financial statement required by Article L. 225-102-1 of the French Commercial Code (Code de commerce) is included in the information relating to the Group given in the management report, it being specified that, in accordance with Article L. 823-10 of said Code, we have verified neither the fair presentation nor the consistency with the consolidated financial statements of the information contained therein. This information should be reported on by an independent third party.