North / South America
Cemex agrees to pay $361m after tax dispute
Mar, 12 2012
(Mexico City) -- Mexican cement and building materials company Cemex SAB said Friday it will pay at least $361 million in back taxes after losing a dispute with the Mexican government over money owed on proceeds from foreign subsidiaries.
Cemex had contested changes in the law in 2005 that required Mexican companies to pay in Mexico on certain income--such as dividends, royalties, interest, capital gains and rental fees--from foreign subsidiaries where income taxes were less than 75% of the corresponding tax in Mexico.
In September 2008 the Supreme Court overturned on appeal a favorable ruling that Cemex had obtained from a lower court.
In a filing with the Mexican stock exchange, Cemex said it determined its tax debt for 2005 at 4.6 billion pesos, or $361 million, of which it paid around $72 million on March 1, with the rest to be paid in January 2013. It said fiscal authorities agreed with the amount.
Cemex spokesman Jorge Perez said the company "considers it has adequate provisions to cover this self-assessment."
The company said it hasn't determined how much it owes for 2006 and 2007, but expects it to be "materially lower" than for 2005. Further changes in the law in 2008 mean the company doesn't foresee any effect on accounts for years after 2007.
Cemex CPO shares on the local stock exchange were up 0.4% at MXN10.18 around 12:50 p.m. EST.
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