America Movil's Claro must pay further $123 mln to Ecuador -report

QUITO, June 6 Fri Jun 6, 2014 11:35am EDT

QUITO, June 6 (Reuters) - America Movil subsidiary Claro must pay $123 million in back taxes to Ecuador as part of a settlement to a lengthy legal battle between the company and the Andean country, said a local official quoted by an Ecuadorean newspaper on Friday.

Ecuador's Supreme Court sided with the government in the dispute, ruling that the telecommunications giant still had taxes owing for the 2003 to 2006 period.

"In this case the court ruled in favor of the state, so we are expecting the company will proceed to pay the balance that they owe," the director of the country's tax agency, Ximena Amoroso, told local newspaper El Telegrafo.

Representatives for Claro were not immediately available to comment.

The ruling is part of a six-year ongoing legal battle between the country and Claro, which last year paid Ecuador $113.5 million for taxes owed between 2003 and 2006. The government, however, contended that Claro owed additional funds.

The decision also requires the company to pay $29 million in worker compensation. It was not clear whether this amount was included in the $123 million fine or if it was separate.

Claro is Ecuador's biggest mobile operator, with a 67.8 percent market share and about 17.8 million subscribers. Its parent company, America Movil, is controlled by Mexican billionaire Carlos Slim.

Multinational Telefonica's Ecuador subsidiary has 28.86 percent of the cellphone market, according to the state telecoms regulator, while the state company CNT has the remaining 3.28 percent.

CNT recently won a complaint against Claro for anti-competitive practices, for which the company was fined $138.4 million. (Reporting by Alexandra Valencia, writing by Julia Symmes Cobb; Editing by Nick Zieminski)