25th Nov 2016 12:07
LONDON (Alliance News) - Unilever PLC on Friday said it will appeal an "adverse" judgement from a judicial court in Brazil regarding its indirect tax case that will result in it having to pay a EUR590 million deposit to the court.
The consumer goods and personal care giant has been undergoing legal proceedings against a claim for EUR590 million in indirect taxes in Brazil, which a prior judicial review had ruled in Unilever's favour.
However, the case was referred to a higher court, which on Friday Unilever said reached an "adverse" ruling for the company. Unilever said it will appeal against the ruling at the Brazilian Supreme Court, but in the meantime needs to either provide a guarantee to the Brazilian government or pay a judicial deposit to the court equating to the potential amount owed.
Given any penalty payments are "much reduced" if a deposit is made, Unilever has decided to pay the EUR590 million judicial deposit, which it said will be recognised as a non-current financial asset and hence will not impact reported free cash flow.
"As we still believe our case remains strong, we are continuing to include this in our contingent liabilities, and there is no charge to the profit and loss statement as a result of this latest judgement," Unilever said.
Shares in Unilever were trading up 1.4% at 3,162.50 pence on Friday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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