Intcomex and TGM, SA

Miami, FL: (Jul-06-07) The Uruguayan tax agency Direccion General Impositiva (DGI) brought charges against Intcomex and its Uruguayan subsidiary, TGM, SA following a tax audit for the period 2002 through 2006. The audit raised questions about the alleged failure of two local suppliers to pay value added and other taxes in connection with the sale of certain IT products to TGM. Uruguayan subsidiary TGM cooperated fully with the audit and, based on an internal investigation, it was declared that TGM has at all times complied with its tax payment obligations and properly recorded, reported, and paid all taxes.

At the same time, due to the possibility of significant potential fines and related legal expenses, TGM approached the DGI seeking a resolution, and after negotiation agreed to pay the amount of UYP 53.0 million, or approximately US $2.2 million, and forfeit US $500,000 in previously recognized tax credits in connection with the Settlement Agreement. Further, TGM engaged in a parallel negotiation process with the Uruguayan customs authorities relating to the same time periods and facts, and expects to enter into a similar settlement agreement with the customs authorities providing for the payment of UYP 26.2 million, or approximately US $1.1 million. [EARTH TIMES: TAX AUDIT]

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Published on Jul-9-07