Deutsche Post AG : Deutsche Post To Pay VAT Taxes Of EUR516 Million For 1998-2010; Confirms Outlook
06/05/2012| 03:27am US/Eastern
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Mail and logistics company Deutsche Post DHL AG (DPW.XE) said Tuesday a EUR516 million payment of value-added taxes for the years 1998 to 2010 will hit its net profit this year, but it still expects to fulfill full-year guidance.
MAIN FACTS:
-German financial authorities have issued a notice of assessment to Deutsche Post DHL that will result in an additional VAT payment of EUR516 million.
-The decision is the result of a comprehensive review of complex tax issues and covers the period from 1998 until when the revised VAT law for postal services came into force in 2010. A large part of the additional payment amount relates to tax issues, for which the Group had already partially formed reserves.
-In addition, authorities had retrospectively examined several postal services for tax liability, which were previously exempt from VAT.
-To implement the decision the company will make a one-time payment of EUR516 million in the third quarter of 2012.
-As the company had already formed reserves in previous years, Group earnings before interest and taxes in the third quarter of 2012 will be impacted by EUR180 million.
-The impact on net profit is expected to be EUR265 million.
-Taking into account these effects, the Group fully confirms its previous guidance for the full year.
-Although many facts allow different interpretations in the application of E.U. and German VAT law on postal services, the Group will accept the decision taken to establish legal certainty and avoid years of legal battles with uncertain outcomes.
Write to the Frankfurt Bureau at djnews.frankfurt@dowjones.com
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