Orange : Orange :Tax litigation in relation to financial year 2005: Orange to appeal

Orange : Orange :Tax litigation in relation to financial year 2005: Orange to
                                    appeal

                                                                 press release
                                                           Paris, 25 July 2013

Tax litigation in relation to financial year 2005: Orange to appeal

In a  judgment  dated 4  July  2013,  the Administrative  Court  of  Montreuil 
(France) rejected the Group's motion for judicial review, which was  submitted 
in November  2011,  in legal  proceedings  regarding tax  issues  following  a 
simplification of the Group's corporate structure in 2005.

This operation, implementing a decision to simplify the Group's  organization, 
consisted of a  merger (transmission  universelle du  patrimoine) into  France 
Telecom S.A. (now Orange S.A.) of a French holding company that held about  60 
subsidiaries and shareholdings; this  operation had no  impact on the  Group's 
corporate and consolidated earnings.

Due to significant losses recorded by some of these assets, provisions for the
impairment of shares  of that  holding company  were recorded  in the  Group's 
accounts before  the  transmission  universelle  du  patrimoine.  However,  in 
conformity with the  tax authority's  position at the  time, these  provisions 
were never deducted from the company's taxable income. The dissolution without
liquidation of the holding  company then led France  Telecom to a reversal  of 
these provisions for impairment of shares. These reversals were not  accounted 
back into the tax earnings of the Group, in line with applicable fiscal  rules 
and in order to avoid double taxation.

Orange takes note of  this decision that effectively  prevents a company  from 
deducting provisions from its taxable income and leads to a second  imposition 
on these same provisions once  reintegrated into the company's accounts.  This 
simple  analysis  fully  justifies  an   appeal  against  this  judgment;   in 
consequence, the Group will file a case in the coming days.

Since the appeal process does not have the effect of suspending payments,  the 
amount of €1.952 billion  will be paid  to the tax authorities  at the end  of 
July and an amount of €190  million in September, the latter corresponding  to 
additional late interest.

This tax litigation is disclosed in the Group's Reference Document since 2010,
from which year  it has  also been provisioned  for in  the Group's  financial 
accounts (refer to §10.1 of the Registration Document for 2010, page 418), and
updated since (for the most recent update, refer to the Registration  Document 
for 2012, §12.1, page 406). In  addition, the information given to the  market 
on this tax litigation has been widely taken into account by analysts in their
valuations (in the "sums of the parts", under section "tax liability").

In keeping with its prudent financial policy, the Group has maintained a  high 
level of liquidity allowing it to meet these payments now.

In addition,  the  judgment  of the  Court  has  no impact  on  the  operating 
performance of the Group.

about Orange
Orange is one of the  world's leading telecommunications operators with  sales 
of 43.5 billion euros in 2012 and has 170,000 employees worldwide at 31  March 
2013, including  104,000 employees  in France.  Present in  32 countries,  the 
Group has a total customer base of close to 230 million customers at 31  March 
2013, including 172 million mobile customers and 15 million broadband internet
(ADSL, fibre) customers worldwide. Orange is also a leading provider of global
IT and telecommunication services to multinational companies, under the  brand 
Orange Business Services.
Orange is listed on the NYSE Euronext  Paris (symbol ORA) and on the New  York 
Stock Exchange (symbol ORAN).
For more  information on  the  internet and  on your  mobile:  www.orange.com, 
www.orange-business.com, www.orange-innovation.tv or to follow us on  Twitter: 
@presseorange.
Orange and any other Orange product or service names included in this material
are trade marks of Orange or Orange Brand Services Limited.

Press contacts: +33 1 44 44 93 93
Sébastien Audra, sebastien.audra@orange.com
Olivier Emberger, olivier.emberger@orange.com

Orange: Tax litigation in relation to financial year 2005

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