By JIGGSLAW. Further to a Supreme Court judgment against a subsidiary of Telefonica in Peru, the latter is again facing a new investment arbitration against Peru for a 2000 and 2001 corporate tax payment dispute.
On January 17, 2023, Telefonica Peru presented a crucial fact before the Peruvian Financial Conduct Authority, which explains that “the fifth chamber of the Constitutional Supreme Court, which is responsible for tax and administrative matters, notified a final judgment against the company in an administrative corporate tax proceeding for years 2000 and 2001.”
In this case, the company would be waiting to know the amount of the fine because they may go back before ICSID even if Supreme Court’s judgment is final (see “Telefonica will have to pay the biggest fine in its history following a tax battle loss in Peru.” El País, January 18, 2023.)
In this case, the company will be waiting to learn the amount of the fine, and even if the Supreme Court’s decision is final, they may have to go back to the CIADI (see “Telefonica will have to pay the largest fine in its history after losing a tax battle in Peru,” El Pas, January 18, 2023).
Other sources assume Telefonica has already filed an investment arbitration claim in which it claims that the delay of Peru in handling the dispute that has increased due to interest on the tax claim (see “ Telefonica brings Peru before ICSID for a fine of 100 million plus 20 years’ interest.
Open arbitration.
Telefonica SA’s first investment arbitration against Peru was filed before the International Center for Settlement of Investment Disputes (ICSID) in March 2021, citing noncompliance with the 1994 Bilateral Investment Treaty between Spain and Peru for tax claims. Telefonica claims that SUNAT used arbitrary and discriminatory actions in a dispute that dates back to 1998, 2000, and 2001, in which 99% of the disputed amount is related to interest because the Spanish company claims to have met its corporate tax obligations.
