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French authorities waived off Anil Ambani's $162 million tax debt during Rafale negotiations: report

By the time the Rafale deal was announced, the tax debt owed by Anil Ambani's firm had reached Rs 151 million euros, but the French authorities accepted 7.3 million euros as a settlement.

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French authorities waived off Anil Ambani's $162 million tax debt during Rafale negotiations: report
Reliance Communications has denied any wrongdoing and said the tax dispute was settled under the legal framework.

French tax authorities waived off tax debt to the tune of 143.7 million euros, or $162.6 million, in favour of Anil Ambani's France-based telecom company Reliance Flag Atlantic France. The tax dispute was reportedly settled between the months of February and October in 2015, at the time when India and France were negotiating the deal for 36 Rafale jets.

French tax authorities reportedly found Anil Ambani's company liable to pay 60 million euros in taxes for the period 2007 to 2010, French media outlet Le Monde reported. Reliance Flag Atlantic France offered to pay 7.6 million euros as a settlement, which was refused by the French authorities.

Another investigation was conducted for the period 2010 to 2012 and asked Anil Ambani's telecom company to pay additional 91 million euros. In April 2015, PM Narendra Modi announced the deal for purchasing Rafale fighter jets from Dassault. By the time the deal for 36 aircraft was announced, the tax liability for Reliance Flag Atlantic France had climbed to 151 million euros, the report said.

However, only after PM Modi's Rafale announcement, the French tax authorities reportedly waived off Anil Ambani's 143.7 million euros tax debt and accepted 7.3 million euros as a settlement.

Reacting on the matter, Reliance Communications rejected any wrongdoing and said the tax dispute was settled under legal framework which is available for all companies operating in France. An RCom spokesperson said the tax demands were "completely unsustainable and illegal" and that the company denied any favouritism or gain from the settlement.

"During the period under consideration by the French Tax Authorities - 2008 to 2012 i.e. nearly 10 years ago, Flag France had an operating loss of Rs 20 crore (2.7 million euros). French tax authorities had raised a tax demand of over Rs 1100 crore for the same period. As per the French tax settlement process as per law, a mutual settlement agreement was signed to pay Rs 56 crore as a final settlement," he said.

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