June 5 (Bloomberg) -- Deutsche Post AG, Europe’s largest mail carrier, will pay 516 million euros ($642 million) in German back taxes covering 1998 to 2010 to settle a dispute.
The postal company’s earnings goals for 2012 remain intact, even with a second-quarter cost that will cut 180 million-euro from earnings before tax and interest, because of earlier provisions covering part of the payments, Bonn-based Deutsche Post said today in a statement.
Deutsche Post, which has been discussing the scope of the extra value-added tax payment with authorities since 2010, won’t appeal the sum since “the back-and-forth in a court wouldn’t be any different from how the talks have been so far,” Dirk Klasen, a Deutsche Post spokesman, said by telephone. “We want to close the book on the issue.”
Germany’s government is separately demanding that Deutsche Post repay 298 million euros in subsidies that the European Commission said breached antitrust legislation. The German postal operator has already filed an appeal against the European Union ruling.
The tax payment announced today will reduce second-quarter net income by 256 million euros, the postal operator said.
Deutsche Post rose as much as 0.7 percent to 12.89 euros and was trading up 0.5 percent at 9:51 a.m. in Frankfurt. The stock has gained 8.3 percent this year, valuing the company at 15.6 billion euros.
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