German telecoms firm, Deutsche Telekom is reportedly looking into whether the Spanish authorities offer illegal state aid to Spanish companies acquiring their foreign counterparts.
The transaction in question concerns Telefonica SA's planned acquisition of UK-based 02.
Deutsche Telekom argues that the Spanish firm's ability to write off goodwill of EUR11 billion against its home country tax payments, thus reducing its tax liability on the deal by around EUR4 billion is unfair.
Speaking to AFX News, Deutsche Telekom's chief financial officer announced that:
"We're checking whether this is permissible under EU law."
The European Commission has reportedly stated however that the assistance provided by the Spanish authorities is unlikely to be viewed as an illegal subsidy.
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