Local unit of Kuwait's Zain must pay a tax bill related to the acquisition of a rival operator from Egypt's Orascom Telecom
An Iraqi appeals court has upheld a ruling that obliged the local unit of Kuwait's Zain to pay a $187 million tax bill related to the acquisition of a rival operator from Egypt's Orascom Telecom in 2007.
Iraq's tax authority has claimed from Zain Iraq, the country's biggest mobile operator by subscribers, capital gains tax worth $187 million from its $1.2 billion purchase of Iraqna. A bank account freeze on an amount equivalent to the tax bill was imposed.
Unusually, the government has tried to levy capital gains on Zain Iraq as the asset buyer, rather than on the seller, Egypt's Orascom Telecom, which was later renamed Global Telecom.
"The court of appeal has issued a decision about the case on March 30 to uphold the decision of the primary court that had ruled not to accept [Zain Iraq's] claim," a bourse statement from Zain, the majority shareholder in Zain Iraq, said on Thursday.
"The company has a right to appeal the decision at the cassation court within 30 days, and the company will offer an appeal in the coming days," the statement said.