UPDATE 1-America Movil's Claro must pay $123 mln back taxes to Ecuador -agency

Fri Jun 6, 2014 5:33pm EDT

(Changes source to tax agency, adds context on anti-trust decision)

QUITO, June 6 (Reuters) - America Movil subsidiary Claro must pay $123 million in back taxes to Ecuador as part of a settlement to a six-year legal battle with the Andean country's government, the tax authority said on Friday.

Ecuador's Supreme Court sided with the government in the dispute, ruling that the telecommunications giant still owed taxes for 2003 to 2006 despite an extra $113.5 million payment it made last year for those years.

"The company must pay the Ecuadorean state $123 million, now the Supreme Court has ruled," the country's tax authority said in a statement.

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 bill or if it was separate.

"We anticipate that the company will pay the amount owed," the statement said.

Representatives for Claro were not immediately available for comment.

Claro is the largest mobile operator in Ecuador, with a 67.8 percent share of the country's 17.8 million mobile customers. 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. Claro is appealing the decision.

In 2008, America Movil paid around $480 million to renew its concession to operate in the country until 2023. (Reporting by Alexandra Valencia, writing by Julia Symmes Cobb; Editing by Peter Murphy, Nick Zieminski and Richard Chang)