Peru vs. Telefonica, July 2019, Supreme Court, Case No 11111-2016, Lima

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Telefónica brought before the Supreme Court of Peru the following issues related to a long lasting dispute with SUNAT – the Peruvian tax authorities:

1: Financial Charges – Carve Out
2: Withdrawal of assets of majority shareholder Telefónica del Perú S.A.A.
3: Depreciation of fixed assets transferred
4: Tax deduction for “Overhead”
5: Provision for doubtful debt collection

The Supreme Court agreed with the tax authorities on issues 1 and 4 (carve out financial charges, related to the way in which they were financed; and the overhead tax deduction, which the tax authorities considered to be an incorrect application of accounting standards).

The remaining three issues are still awaiting final determination.


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