IQE PLC Iqe Plc : Settlement Of Prior Year Taxes
20 October 2017 - 5:00PM
UK Regulatory
TIDMIQE
Cardiff, UK. 20 October 2017: IQE plc (AIM: IQE, "IQE" or the "Group"),
the leading global supplier of advanced wafer products and wafer
services to the semiconductor industry, announces the settlement of
prior years' tax liabilities.
The Group recently engaged the services of an international tax firm to
assist with a routine US tax filing for the year ended 2016.
Unexpectedly, this exercise has identified taxes due in the US relating
to the profits of an overseas subsidiary for the years ending 2013,
2014, 2015 and 2016, which follow the acquisition of the epitaxy
business of Kopin in January 2013. This firm has estimated the tax due
as approx. GBP4.2m, and is in the process of calculating the actual
amount, which may take up to 4 weeks. IQE immediately initiated the
payment of the estimated amount to the relevant tax authority, and will
adjust any over/under payment in due course. On the advice of this firm,
IQE has also accrued interest due of up to GBP0.4m. As a result of a
Group re-organisation initiated in September 2016, but unrelated
directly to this previously advised tax treatment, it is believed that
no similar tax liability arises in 2017.
IQE has historically used a local independent firm of tax advisors for
routine corporate tax filings, supplemented with the advice of larger
firms of independent tax advisors for tax strategy, planning, and
transactional work. The original tax structuring of the acquisition of
the Kopin epitaxy business was done in accordance with advice of a large
mid-tier US legal and tax firm working in conjunction with IQE's local
independent tax advisor. IQE used the same local independent firm to
complete the routine tax returns for 2013 to 2015, and supplemented this
for 2016 with the international tax firm to bring expertise around the
aforementioned restructuring. The same international tax firm has
supported IQE with its transfer pricing compliance for the last four
years, and in other ad hoc areas as necessary. IQE is clearly extremely
disappointed with the previous professional advice received and will be
pursuing full recompense as a matter of priority with the previous
advisors.
The tax paid was previously unaccrued, and hence this will result in a
prior year adjustment to the comparative figures in the next annual
report. There is no impact, or additional tax payable, on the expected
trading results for 2017.
Whilst there are no indications of any further potential omissions, the
Board yesterday approved the use of an international independent tax
firm to undertake a complete IQE group tax review.
The Group has enjoyed a strong Q3 with continuing growth driven largely
by the ongoing strong VCSEL ramp in support of a highly significant mass
market consumer application, and the new Foundry expansion remains on
course to open in H1 2018. As a result, the Board remains confident the
Group is on track to deliver full year expectations, including that of
net debt.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this announcement,
this inside information is now considered to be in the public domain.
CONTACTS
IQE plc +44 (0) 29 2083 9400
Drew Nelson
Phil Rasmussen
Chris Meadows
Canaccord Genuity + 44 (0) 20 7523 8000
Simon Bridges
Henry Fitzgerald O'Connor
Richard Andrews
Peel Hunt +44 (0) 20 7418 8900
Edward Knight
Nick Prowling
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: IQE plc via Globenewswire
http://www.iqep.com
(END) Dow Jones Newswires
October 20, 2017 02:00 ET (06:00 GMT)
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