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BUSINESS

Samsung agrees to pay back taxes on Spanish profits

South Korean firm to hand over 9.5 million euros for the period 2005-2008

South Korean electronics giant Samsung has reached an agreement with the Spanish tax authorities under which it will pay more taxes.

 Samsung agreed with the AEAT tax agency to revise the prices of transfers of products from overseas to increase its profit margin. As a result, in the wake of an inspection of its books, it will pay 9.5 million euros in back taxes for the period 2005-2008.

AEAT last month set up a special unit to strengthen its monitoring of the tax situation of multinationals with subsidiaries in Spain. The government has complained that companies such as Amazon, Google, Yahoo, Apple and Starbucks are paying too little in tax as a result of aggressive avoidance systems.

Samsung has a conventional set-up in Spain, with its local unit Samsung Electronics buying products from its parent company to sell locally. Companies such as Apple and Google bill sales made in Spain through Ireland, which has a much lower corporate tax rate.

Samsung’s Spanish unit last year declared sales of 1.352 billion euros, whereas Apple Marketing Iberia declared only 17.75 million, just 1 percent of the actual sales generated in Spain.

Samsung’s sales last year were underpinned by a 66-percent increase in sales of its Galaxy range of smartphones, which offset falls in other products such as household electrical goods.

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