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Zain settles tax lawsuit in relation to Iraqna takeover

22 Dec 2016

Zain Iraq has agreed to pay USD94 million to settle a tax case related to the acquisition of rival operator Iraqna from Egypt’s Orascom Telecom, Kuwaiti parent Zain Group said in a press release. Iraq’s tax authority the General Commission of Taxes (GCT) claimed that Zain Iraq owed USD187 million in capital gains tax due on its USD1.2 billion acquisition of Iraqna in 2007, while Zain argued that capital gains tax should only apply to the seller, in this case Egypt’s Orascom Telecom.

Under the new settlement with the GCT and the country’s Ministry of Finance, the Iraqi authorities will drop the claims against Zain Iraq, cancel associated owed interest and penalties, and allow Zain Iraq to appeal against additional tax assessments for the periods of 2004-10 (Zain) and 2004-07 (Iraqna).

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