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Costa Rica raids Telefónica offices in tax fraud probe

Bnamericas Published: Wednesday, January 09, 2019
Costa Rica raids Telefónica offices in tax fraud probe

Costa Rica's public prosecutor office raided the local offices of Telefónica as part of a tax fraud investigation looking at whether the Spanish telco sold key assets to one of its own units in the past in order to avoid tax payments.

The raid on the offices of Telefónica de Costa Rica, its local unit Tejisa, law firm Zurchher Odio & Raven and auditing firm KPMG sought to "obtain proof in an investigation being carried out over the alleged crime of defrauding the internal revenue service," said a statement from the public prosecutor's office.

Prosecutors are looking at whether Telefónica avoided paying 1.25bn colones (US$2mn) in taxes in fiscal year 2017 by creating a local subsidiary and in turn selling to the local unit essential assets to carry out its main economic activity. The subsidiary allegedly had to obtain financing from Telefónica for the leasing agreement, which allowed the Spanish telco to deduct income taxes for assets that it never stopped owning, the prosecutor's office said.

Telefónica de Costa Rica was quoted as saying by local media that it was collaborating with the authorities.

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