Orascom Loses Algerian Tax Appeal
Friday, March 12, 2010
Egyptian telecom company, Orascom Telecom, has announced that its Algerian
subsidiary, Orascom Telecom Algérie (OTA), has received a rejection to
its appeal, made in December last year, against the notice for taxes and penalties
it had received from the Algerian tax authorities the month previously.
The notice, amounting to DZD43.9bn (USD615m), was levied in respect of the
2005, 2006 and 2007 tax years. Although OTA has said that its accounts were
fully audited during those years, the Algerian tax department increased OTA’s
income and non-deductible expenses, resulting in a 45% increase in taxable profits.
OTA also argued that, during the period in question, it had the benefit of tax
exemptions and protections granted under an investment agreement.
Pending the hearing of the appeal, OTA was not required to pay the full amount
of the tax notice. In order to file its appeal, however, OTA had to pay 20%
of the reassessment, which is recoverable if OTA's appeal is ultimately successful.
If OTA now wishes to continue through the appeal process, either before the
Central Commission or the State Counsel, it will be required to pay another
20% of the remaining balance of the alleged taxes and penalties from its own
resources. The amount paid will again be recoverable if OTA is successful in
In a statement, it was confirmed that OTA does indeed intend to pursue the
Algerian appeal system, and will soon pay over the required amount. On the other
hand, its parent company, Orascom Telecom, has said that it is exploring all