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On July 3, 2009, the French Supreme Court of Appeal announced that it would postpone ruling on the French State’s appeal and on August 4, 2009, it applied to the Court of Justice of the European Communities (ECJ) for a preliminary ruling on this issue.

After reviewing the matter, the ECJ’s final ruling was handed down on September 15, 2011. In this ruling, the ECJ held that the French prĂ©compte/tax credit system restricts the freedom of establishment and free movement of capital.

During 2011 and 2012, Accor and the tax authorities submitted various briefs to the Supreme Court of Appeal and Accor produced documentary evidence of the EU source dividends and of the tax paid by its European subsidiaries on the distributed amount.

On November 21, 2012, the Supreme Court of Appeal met to review the reporting judge’s conclusions. In summary, the reporting judge considered that the dividend tax credit and prĂ©compte withholding tax systems had been shown to be incompatible. However, he also considered that the amount to be refunded was subject to strict rules which, to all intents and purposes, restricted Accor’s right to a refund.

On December 10, 2012, the Supreme Court of Appeal handed down a ruling closely aligned with the reporting judge’s conclusions, according to which Accor was entitled to €6.3 million the €156 million already refunded. In addition to the €149.7 million to be returned to the French State, Accor is also required to repay the late interest received in 2007, amounting to approximately €36.4 million, less the portion related to the retained refund of €6.3 million. The repayment will be calculated by the tax authorities during the first half of 2013; it is estimated at around €1.4 million. The €149.7 million and related late interest will be repaid to the French State during the first half of 2013.

In the 2012 financial statements, the €6.3 million prĂ©compte refunded to Accor and not repayable to the French State has been credited to a reserve account (see Changes in consolidated shareholders’ equity). The estimated €1.4 million in late interest received on this amount has been considered as offsetting the early payment of tax, and has therefore been recorded as a tax benefit in the income statement. The total amount repayable to the French State, representing approximately €184.7 million, will lead to an increase in net debt of the same amount.

Accor has noted the Supreme Court of Appeal’s decision and is examining the avenues of appeal open to it before the European courts.

Financial statements



On February 7, 2007, Accor filed an application originating proceedings before the Cergy Pontoise Adminstrative Court on the same grounds, to obtain a refund of the €187 million in prĂ©compte withholding tax paid in the period 2002 to 2004. There were no developments concerning this matter in 2012. Since the beginning of 2013, Accor has been informed that the Administrative Court will complete its examination by May 13 and will hear the case on June 12.

Tax dispute in Italy

In October 2011, the Italian tax authorities notified several Accor and Edenred subsidiaries of a €27.4 million tax reassessment concerning registration duties. The reassessment is based on the requalification as the sale of a business subject to registration duty of a number of transactions carried out as part of the reorganization of Accor’s Services division in Italy between 2006 and 2010.

The Accor and Edenred companies concerned wrote to the Italian authorities on December 16, 2011 contesting the reassessments.

The reassessment notices required settlement of the tax deficiencies within 60 days and the companies concerned therefore paid the amounts claimed on December 16, 2011. The cost was shared equally between Accor and Edenred pursuant to an agreement assigning the risk and any resulting costs to the two parties on a 50/50 basis.

The companies believe that the tax reassessment is without merit and, after consulting with their legal and tax advisors, consider that their challenges have a reasonable chance of success. No related impact was recorded in Accor’s 2011 consolidated income statements. There were no developments concerning this matter in 2012.

Other claims and litigation

In the normal course of its business, the Group is exposed to claims, litigations and proceedings that may be in progress, pending or threatened. The Company believes that these claims, litigations and proceedings have not and will not give rise to any material costs at Group level and have not and will not have a material adverse effect on the Group’s financial position, business and/or results of operations.