L’Oreal agrees to US$352 mil settlement with tax authority

L’Oreal records sales of €14.8 billion in the six months to July. (Reuters pic)

PARIS: L’Oreal, the world’s biggest cosmetics company, said on Friday that it would pay the French government €320 million in a settlement with the country’s tax authorities.

The French group said the payment, relating to the payment of corporate tax between 2014 and 2018 by several subsidiaries including Lancome Parfums et Beaute, was the result of “constructive discussions with the French tax authorities”.

It represents less than 10% of its 2018 net profit for 2018 of €3.89 billion.

L’Oreal said the sum would be recorded as an exceptional charge for 2019 and would “have no significant recurrent impact in the future”.

The Lancome brand has been a star of the group’s strongly-performing luxury division, which saw sales rise 15.5% in the first half of 2019.

The group as a whole saw sales of €14.8 billion in the six months to July, with like-for-like growth in the period at 7.3%, its highest in more than a decade.