Itau Unibanco Holding SA, Latin America’s largest bank by market value, said Brazil levied tax charges of 18.7 billion reais ($7.9 billion) on its 2008 purchase of Unibanco.
Brazil’s tax agency, Receita Federal, told Itau it should have booked the acquisition in a way that would “generate a taxable gain,” the Sao Paulo-based bank said in a regulatory filing today. Itau said it’s challenging the charges.
“The company considers as remote the risk of losing the case, an understanding confirmed by its lawyers and external advisers,” Itau said in the statement, which was signed by Alfredo Setubal, director of investor relations.
Itau agreed to buy Unibanco for about 26.7 billion reais in 2008, the biggest Brazilian banking-industry deal. Last year, the bank spent 11.8 billion reais to take private Redecard SA, Brazil’s second-biggest card-payment processor.
Itau declined 1.6 percent to 29.34 reais in Sao Paulo at 12:58 p.m., the biggest drop on Brazil’s Ibovespa benchmark index.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at firstname.lastname@example.org