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Telefonica's Peru License Renewed Despite Tax Spat

by Mike Godfrey, Tax-News.com, Washington

29 January 2013

The Peruvian authorities have finally agreed to extend Spanish telecoms company Telefonica's license despite an unresolved tax dispute worth PEN2bn (USD860m).

Telefonica had been engaged in consultations with the government since August 2011 to gain approval for a license extension for the next twenty years. The operator's mobile license in Lima expired in 2011 while its license for operating in the remainder of the country was due to expire at the end of 2012.

The Peruvian authorities claim that Telefonica owes around PEN2bn in back taxes for the tax years 2000 and 2001. The company intends to continue to appeal the assessment, arguing that the company is entitled to deduct its significant investment expenditure for those years from its income tax dues, in line with Peruvian tax law.

The decision to extend Telefonica's license came days before a visit by Spanish Prime Minister, Mariano Rajoy.

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TAGS: tax | law | telecoms | Peru

 






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