In a regulatory filing on Wednesday, Tata Communications said the National Court of Spain had ruled in favour of TC Spain and overturned the decision of the Tribunal Económico Administrativo Central (TEAC), an administrative tax tribunal.
"We wish to inform that the National Court of Spain has ruled in favour of TC Spain and has annulled the resolution of the Tribunal Económico Administrativo Central (‘TEAC’), including the VAT demand and the corresponding penalty imposed by the Spanish Tax Agency (‘STA’) thereon," the company said.
What was the tax dispute about?
The case involved a claim for a refund of input value-added tax (VAT) by Tata Communications' Spanish subsidiary and a corresponding demand raised by the Spanish Tax Agency.
According to the company's earlier disclosures, the tax authorities had raised a demand of €15,505,607.73 towards VAT and interest, along with a penalty of €18,102,272.48.
The combined amount stood at approximately €33.61 million.
TC Spain had challenged the decision of TEAC before the National Court of Spain, where the matter was pending.
The company had first disclosed the material litigation in an exchange filing dated August 14, 2023, and subsequently provided updates through its quarterly governance filings.
The National Court has now ruled in favour of the Tata Communications subsidiary, annulling the TEAC resolution along with the tax demand and associated penalty imposed by the Spanish Tax Agency.
However, Tata Communications cautioned that the matter has not yet reached legal finality.
"The judgment constitutes a material development in the aforesaid litigation. However, the matter remains subject to further legal and administrative processes available under applicable law and has not attained finality," the company said.
The company further clarified that the ruling remains subject to appellate remedies and other legal or administrative proceedings that may be available under Spanish law.