Statement: End of a tax dispute relating to fiscal years 2008-2013 with no cash impact

VELIZY-VILLACOUBLAY, France — June 1, 2022 —  The French Supreme Court (Conseil d'Etat) rendered, on the 31st of May 2022, two decisions which reclassify the nature of the amounts received by Dassault Systèmes SE in respect of preferred shares issued by its subsidiaries in the United States during the acquisition of the American companies Abaqus and MatrixOne in 2005 and 2006 thus depriving Dassault Systèmes from the benefit of the participation exemption regime which is in principle the common law regime applied to dividends received from French and foreign subsidiaries.As part of these strategic acquisitions, it was important to meet the objectives of foreign exchange rate volatility and liquidity risk management. The chosen financing method has benefited from a tax regime that favors business combinations in the United States, which Dassault Systèmes and its advisors have always considered compliant with tax legislation in both France and the United States.

These decisions bring to a close a long procedure during which the tax administration changed its position several times and which had given rise to an initial favorable decision on September 9, 2020.

Dassault Systèmes disagrees with the new technical analysis of the Supreme Court and is questioning that its procedural rights, and in particular those related to an ultimate change of motivation, have not been respected. Nevertheless, Dassault Systèmes takes note of these decisions, which have no impact on its Non-IFRS net income or on its IFRS cash flow statement as all amounts have been already paid to the French tax authorities. Dassault Systèmes will reflect a net tax expense of 122 million Euros, which covers all the reassessed years in its second quarter 2022 IFRS earnings. 

This dispute has been described in the Consolidated financial statements  since 2014 (refer to the 2014 Registration Document, Note 25, p. 119), this information have been updated regularly (see the latest update in the Universal Registration Document 2021, Note 24, p. 159). Dassault Systèmes is firmly committed  to ethical and sustainable growth based on a transparent and responsible tax policy in all countries where the company operates (see 2021 Universal Registration Document section 2.6.3).