The European Commission asked France to recover €1.37 billion from Electricite de France due to 'incompatible' aid, the commission said in a press release on Wednesday.
According to the statement, the commission agreed on that the main electricity provider in France, EDF, has been granted tax breaks incompatible with EU rules on State aid.
'This tax exemption conferred on EDF an undue economic advantage compared with other operators on the market and so distorted competition,' the statement said.
In 1997, France did not collect all the corporation tax payable by EDF, when certain accounting provisions were reclassified as capital, according to the statement.
'The Commission's investigation confirmed that EDF received an individual, unjustified tax exemption which gave it an advantage to the detriment of its competitors, in breach of EU State aid rules,' Margrethe Vestager, the Commissioner responsible for competition policy, quoted in the statement.
The commission underlined that EDF has to repay that aid, 'in order to remedy this distortion.'
'Whether private or public, large or small, any undertaking operating in the Single Market must pay its fair share of corporation tax,' added Vestager.
According to the statement, the French State is the majority shareholder of EDF, holding 85 percent of the capital. The commission's decision concerns facts dating back to 1997, when EDF was not yet a public limited company but a publicly owned industrial and commercial entity with special status.
By Huseyin Erdogan
Anadolu Agency
huseyin.erdogan@aa.com.tr