L'Occitane unit settles tax disputes with French authorities

    L'Occitane (00973) said the French tax authorities (FTA) and Laboratoires M&L S.A. (M&L), a subsidiary of L'Occitane, reached an agreement on the level of intercompany transactions with about EUR6.6 million of additional income tax and other taxes for financial years ended 31 March 2012 and 2013 and a tax relief for the financial year ended 31 March 2014. The EUR6.6 million is provided for as income tax expense in the financial year ended 31 March 2016.
  In accordance with the related French law, a tax re-assessment triggers a re-assessment of L'Occitane's legal profit sharing with its employees in France. Accordingly, L'Occitane records additional profit sharing plus social charges of EUR3 million as "other losses" in the operating profit in FY2016. The additional profit sharing will be paid out during the financial year ending 31 March 2017.
  In relation to the aforementioned tax and profit sharing re-assessments, M&L also recognises late payment interests of EUR2.5 million as finance costs in FY2016.
  In summary, the total financial impact of the one-off items listed above on FY2016 is EUR14.6 million, with EUR3 million on operating expenses, EUR2.5 million on finance costs and EUR9.1 million on income tax expenses.
  The FTA are about to start the audit of the tax return filed by M&L for FY2015. After consulting its tax advisors, L'Occitane considers no risks for FY2015 nor FY2016 and does not record any provision in FY2016.