315
Annual Report -
2013
-
Vivendi
4
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 28. Litigation
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Actions related to the ICMS tax
GVT, like all other telecommunications operators, is party in several
Brazilian States to various proceedings concerning the application of the
“ICMS”
tax Impostors Sober Circulaçãos de Mercadorias e Prestaçãos
de Serviços (ICMS)
is a tax on operations relating to the circulation
of goods and the supply of transport, communication and electricity
services.
GVT is notably a party to litigation in various Brazilian States concerning
the application of the ICMS tax on voice telecommunication services.
GVT argues that the ICMS tax should not apply to monthly plans. Of the
21 proceedings initiated by GVT, 19 have resulted in decisions favorable
to GVT and 12 are no longer subject to appeal.
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Action related to the FUST and FUNTTEL taxes in
Brazil
The Brazilian tax authorities argue that the assessment of the
taxes known as “FUST” (
Fundo da Universalizaçãos dos Serviços
de Telecomunicaçõ
s), a federal tax to promote the supply of
telecommunications services throughout the whole Brazilian territory,
including in areas that are not economically viable, and “FUNTTEL”
(
Fundo para Desenvolvimento Tecnológioco das Telecomunicações
),
a federal tax to finance technological investments in Brazilian
telecommunications services, should be based on the Company’s gross
revenue without deduction for price reductions or interconnection
expenses and other taxes, which would lead to part of that sum being
subject to double taxation. GVT is challenging this interpretation and
has secured a suspension of payment of the sums claimed by the tax
authority from the federal judge.
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Proceedings brought against
telecommunications operators in Brazil
regarding the application of the PIS
and COFINS taxes
Several proceedings were initiated against all the telecommunications
operators in Brazil, including GVT, seeking to prevent invoices from
being increased by taxes known as “PIS” (
Programa de Integraçãos
Social
) and “COFINS” (
Contribuição para Financiamento da Seguridade
Social
), which are federal taxes that apply to revenue from the provision
of telecommunications services. GVT believes that the arguments in
its defense have a stronger basis than those of the historic operators
insofar as GVT operates pursuant to a more flexible license that allows
it to set its own tariffs.
