IFF reaches settlement income tax disputes with Spain

IFF reaches settlement on income tax disputes with Spain

12:05 PM, 2nd August 2012
IFF reaches settlement on income tax disputes with Spain

NEW YORK, US: International Flavors & Fragrances Inc has reached an overall settlement with Spanish tax authorities regarding income tax deductions taken by its Spanish subsidiaries for the fiscal years 2004 through 2010. As part of the overall settlement, IFF and the Spanish tax authorities have also preliminarily agreed upon the key principles to be incorporated into an agreement that will establish the tax basis for the company’s activities in Spain for 2012 and future years.

In accordance with the overall settlement, IFF and the Spanish tax authorities agreed to settle all disputes and claims for fiscal years 2004 through 2010 in exchange for an agreed-upon aggregate payment of Euro 86.0 million or $105.7 million.

The settlement agreement does not address the Spanish tax authorities’ challenges to similar tax deductions taken in the 2002 and 2003 fiscal years, which are further along in the Spanish judicial process.

“This settlement was the result of a recent comprehensive and collaborative effort with the Spanish tax authorities and we are pleased with the outcome. Not only does this agreement enable us to eliminate much of the uncertainty associated with our prior tax positions in Spain, but we’ve also gained alignment in principle with the Spanish tax authorities regarding our tax position going forward. In the end, we were able to effectively resolve these tax issues in an amicable manner, and we appreciate the efforts of everyone,” said Doug Tough, Chairman and CEO, IFF.

IFF expects to formalize this agreement prior to the end of 2012 and believes the terms of this agreement will not have a material impact on the company’s effective tax rate for 2012.
© WOC News

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