Telefónica will have to return S/3,000 million to the Peruvian State

Telefónica will have to pay around S/3,000 million to the Peruvian State, by virtue of a Supreme Court ruling that puts an end to a dispute with Sunat over differences in the Income tax (IR) for the years 2000 and 2001, including “80% interest and penalties only” carried over time, according to the company.

This is the largest fine applied in the history of the José María Álvarez-Pallete company, in a scenario foreseen by former minister Pedro Francke, who in an interview with La República in 2021 said that the transnational “should get more serious with Peru and pay what it owes”, after resorting to claims that “exceed reasonableness”.

How did Telefónica come to accumulate this debt? Francisco Eguiguren, former employee of the Attorney General’s Office Sunat In this process, remember that the original amount under discussion was just over S/1,600 million, before starting this “known race” to delay tax processes in our country, which in particular went through cassation more than once.

Let’s see. The IR law allows companies to deduct from their annual declaration “doubtful collections”, that is, the debts that the company estimates could no longer collect from its delinquent clients. For this, Telefónica had to prove to Sunat —and then to each of the courts— that, in effect, it had exhausted its collection methods in each case.

It was not so. Eguiguren explains that Telefónica limited itself to sending standard recorded messages to all its delinquent customers, thus ignoring the requirements of the Constitutional Court to file a debt claim: who am I, what debt are we talking about, how much is it, why are you claiming me, among others . In this way, the Spanish company could not even prove that the calls did indeed materialize because they were not registered either.

But he also sent messages on the telephone bills (paper, for the time) in which they mentioned that the client had the debt. Sunat replied that, with this method, the company was not sure if it was sending a document to a defaulter that he had already paid at the time of being notified. The sign “if you have already paid the debt, ignore this message” was crucial for the victory of the Peruvian State.

discordant position

Spanish media point out that the ruling “will hardly have a financial impact on the group”, because it already had 790 million euros (S/3,063 million as of September 30, 2022) provisioned in case they lost the process, according to the firm itself.

El País, for example, states that Telefónica has more than 900 million euros to attend to other tax claims that they maintain in the courts of Peru. Even this year they injected an additional 155 million for this ‘fund’.

The local position is less optimistic. The Peruvian subsidiary sent a statement in which it says that the original amount of the disputes has increased “exponentially due to the interest generated by the delay, not attributable to the company, of almost 20 years in the processing of disputes”, and does not rule out bring the case before ICSID.

Óscar Picon, former member of the Tax Court, supports this position and points out that litigation is extremely onerous in the country. In addition, he envisions a bad precedent for the rest of the taxpayers and investors, since it is “endorsed that Sunat collect taxes for income that the taxpayer did not obtain.”

“Of the four cases that Peru lost in ICSID, two are due to excesses by the Tax Administration. It is highly probable that a large part, if not the total amount paid by the company, will have to be returned”, he anticipates.

reactions

Luis Arias Minaya, former head of Sunat

“The triumph of the Peruvian State in the tax contingency with telephone It is a demonstration that our institutions do work when reforms based on meritocracy are carried out”.

Francisco Eguiguren, lawyer

“The cornerstone has been the discussion of whether any of Telefónica’s methods really accredited collection management. They always use what is cheapest for them, and today it was expensive for them”.

Ruling communicated to the SMV

Telefónica notified this Wednesday the ruling issued by the Fifth Chamber of Transitory Constitutional and Social Law of the Supreme Court.