Telecom group KPN has made a deal with the tax office to write off the book loss on the sale of German subsidiary E-Plus.
The deal means difference in value between the E-Plus price on KPN’s books and the sale price may be offset against its taxable profits over the next few years, starting with 2014.
Telefónica is paying €8.55bn for E-Plus which was bought for almost €19bn. The deal will allow KPN to cut its tax bill by €3.7bn.
‘Having reached an agreement with the Dutch tax authorities gives certainty about our tax position for the coming years,’ said chief executive Eelco Block in a statement. ‘It is another important step for KPN to continue to invest in its operations and the latest technologies in the Netherlands.’