Fiscal 2022 Universal Registration Document

10.2 Litigation and contingent liabilities

DISPUTES WITH THE BRAZILIAN TAX AUTHORITIES

The subsidiary Sodexo Pass do Brasil is in dispute with the Brazilian tax authorities regarding the tax deductibility of the amortization of goodwill recognized on the purchase of VR in March 2008. For the record, in Fiscal 2017, Sodexo Pass do Brasil received a tax reassessment notice from the Brazilian tax authorities for fiscal years 2010, 2011 and 2012 relating to the deductibility for tax purposes of the amortization of goodwill, with 150% penalties and late payment interest. There assessment amounts to 573 million Brazilian real to date, i.e.,111 million euros as of August 31, 2022 (29 million euros in principal, 43 million euros in penalties and 40 million euros in late payment interest).

Sodexo is firmly disputing this reassessment, which the Brazilian tax authorities originally envisaged during a previous tax audit covering fiscal years 2008 and 2009 but then abandoned. Sodexo considers that the tax amortization of goodwill was valid, both in terms of its underlying reasons and the way it has been recorded. Therefore, the Group considers that there is a strong probability of winning the dispute with the tax authorities, which has been confirmed by its tax advisors.

This dispute was presented on August 14, 2018 for judgment of the competent administrative court (CARF). The court ruled in favor of Sodexo Pass do Brasil as it considered that the goodwill and corresponding tax amortization were legitimately recognized on the acquisition of VR. The judgment therefore confirms that Sodexo Pass do Brasil acquired a full business structure when it purchased VR.

The Brazilian tax authorities challenged the decision by appealing to the Superior Court of Appeal (CSRF). Due to the pandemic, the review of the dispute by the CSRF was postponed several times, and was finally put on the agenda for the hearing of September 13, 2022. This collegiate hearing confirmed the ruling favorable to Sodexo Pass do Brasil by 7 votes to 1. The Group is awaiting written notification of this decision which would definitively end the dispute in its favor.

Consequently, the Group believes, after consulting its advisors, that the risk of an outflow of resources on final settlement of this dispute is low and considers that no provision is to be accounted for in its financial statements as of August 31, 2022.

It is recalled that the tax savings generated by this tax amortization were offset in the consolidated accounts of the Group by a deferred tax expense of the same amount for each of the financial periods concerned, in accordance with IFRS rules.The deferred tax liability related to the reassessed periods amounts to 29 million euros as of August 31, 2022 (24 million euros as of August 31, 2021).

During Fiscal 2021, the subsidiary Sodexo do Brasil Comercial also received a tax reassessment notice mainly linked to the tax deductibility of the amortization of goodwill recognized on the purchase of Puras. The reassessment covers the period from2015 to 2017 and amounts to 198 million Brazilian real to date, i.e., 38 million euros as of August 31, 2022 (of which 9 million

euros in principal and 29 million euros in penalties and late payment interests). In August 2021, the competent administrative Court ruled in favor of Sodexo do Brasil Comercial but the Brazilian tax authorities appealed this first instance decision. However, the Group considers that the risks of a change in the decision are low, considering, on the one hand, that it has strong arguments to contest the tax reassessment and, on the other hand, the outcome of the final hearing favorable to Sodexo Pass do Brasil mentioned above.

The goodwill amount has been fully amortized. The tax savings generated by this tax depreciation were offset in the consolidated accounts of the Group by a deferred tax expense of the same amount for each of the related financial periods, in accordance with the IFRS rules. The balance of the related deferred tax liability amounts to 28 million euros as of August 31, 2022.

In addition, Sodexo and its main competitors have a different interpretation from that of the Tax Administration on the deductibility of PIS/COFIN on certain purchases that are made at a zero rate. Proceedings are still ongoing but suspended pending the decision of the Supreme Courts (which will judge in law on another taxpayer). Based on the opinion of its tax advisers, the Group considers that its chances of success in these proceedings are good and therefore did not consider it necessary at this stage to provision for appropriations deducted to date.

DISPUTE WITH THE FRENCH COMPETITION AUTHORITY

On October 9, 2015, the company Octoplus filed a complaint with the French Competition Authority (Autorité de la concurrence) concerning several French meal voucher issuers, including Sodexo Pass France. Following the hearing of the parties concerned in April and July 2016, the Competition Authority decided on October 6, 2016 to continue the proceedings, without ordering interim measures against Sodexo Pass France.

On February 27, 2019, the prosecution services sent their final investigation report to Sodexo Pass France. In its response filed on April 29, 2019, the Group contested both of the grievances notified by the Authority (exchange of information and foreclosure of the meal voucher market through the Centrale de Règlement des Titres). On December 17, 2019, the French Competition Authority ruled against the meal voucher issuers and fined Sodexo Pass France, jointly and severally with Sodexo S.A., 126 million euros. This decision was formally notified to Sodexo Pass France and Sodexo S.A. on February 6, 2020. Sodexo vigorously contests this decision considering that it demonstrates a flawed understanding of the practices in question and of the way in which the market operates. Sodexo has therefore lodged an appeal against the decision with the Paris Court of Appeal. The hearing was held on November 18,2021, and the Court of Appeal is expected to render its decision on November 24, 2022.