Carrefour - 2017 Registration Document

5 CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017 Notes to the Consolidated Financial Statements CARREFOUR | 2017 REGISTRATION DOCUMENT 255 Claims and litigation 9.2 In the normal course of its operations in around a dozen different countries, the Group is involved in tax, employee-related and commercial disputes and legal proceedings. Tax reassessments 9.2.1 Certain Group companies have been or are currently the subject of tax audits conducted by their local tax authorities. In Brazil, tax audits are in progress covering, in particular, the tax on the distribution of goods and services (ICMS), related tax credits (determination of the amounts claimable and documentation of the claims), and federal contributions to the social integration programme and to the financing of the social security system (Pis-Cofins). The Group has challenged most of the assessments, particularly the constitutionality of certain legislative provisions on which they are based. The estimated risk in each case is reviewed regularly with Carrefour Brazil’s advisors and an appropriate provision is recorded. At December 31, 2017, the corresponding provision totalled 518 million euros (versus 551 million euros at December 31, 2016). Judicial deposits paid in respect of tax reassessments contested by the Group amounted to 509 million euros (517 million euros at December 31, 2016) and are included under “Other non-current financial assets” (Note 12.5). In France, Carrefour was notified of corporate income tax reassessments relating to the scope of the cap on deductible financial expenses in 2014. Carrefour is challenging this reassessment. The tax authorities in several countries have disallowed part of the headquarters expenses deducted by Group companies. The Group has contested these reassessments. Employee-related disputes 9.2.2 As a major employer, the Group is regularly involved in disputes with current or former employees. From time to time, disputes may also arise with a large group of current or former employees. In Brazil, many former employees have initiated legal proceedings against the Group, claiming overtime pay that they allege is due to them. Legal and commercial disputes 9.2.3 The Group is subject to regular audits by the authorities responsible for overseeing compliance with the laws applicable to the retail industry and by the competition authorities. Disputes may also arise with suppliers as a result of differing interpretations of legal or contractual provisions. Contingent liabilities 9.3 To the best of the Group’s knowledge, there are no contingent liabilities that may be considered likely to have a material impact on the Group’s results, financial position, assets and liabilities or business. a total exposure of 2.3 billion euros at December 31, 2017. The main tax risk concerns the amortisation of goodwill for tax purposes related to the acquisition of Atacadão which occurred in 2007. The Group is contesting assessments totalling almost 650 million euros, and filed an appeal at Judicial sphere in the In Brazil, the Group is exposed to tax risks which the Group and its fourth quarter of 2017. counsel consider are unlikely to materialise. The tax risks represent