MADRID: Spanish telecoms group Telefonica’s earnings could hit by up to €437m million from a tax fine in Peru, said the company. The Company further stated that it could still appeal the ruling.
Peru’s tax authorities had notified the company of the court decision earlier this month, Telefonica said in its filing with Spain’s stock market regulator as part of disclosures linked to a rights issue.
“At this stage it is difficult to know if Telefonica will eventually have to pay this fine, which would represent 30 percent of our estimated net cash flow for the year,” BESI Research said in an analyst note, adding Telefonica could settle out of court for a lesser sum.
The ruling refers to apparent errors in Telefonica’s corporate tax payments in 2000 and 2001, according to the prospectus. ($1 = 0.9243 euros) (Reporting by Robert Hetz; Writing by Paul Day; Editing by Sonya Dowsett and William Hardy)
