Telit Communications loses Italian tax penalty appeal

AIM-listed Internet of Things enabler Telit Communications has lost an appeal against an Italian tax penalty.

The company said on Monday that the first level tax court in Italy has rejected the appeals it filed against penalty deeds issued by authorities in August 2015. However, Telit said it plans to appeal and to "vigorously" defend its position, which it has been advised remains strong.

The aggregate value of the penalty deeds is around €5m, as set out in the group's annual report for the year ended 31 December 2016.

This is separate from the dispute on the merits of a tax assessment and certainty associated penalties with regard to historical VAT assessments in Italy.

In January, Telit said that two levels of tax court in Italy had previously found in favour of the company on the merits of whether VAT assessments for the 2005, 2006 and 2007 tax years should have been made against it.

"This matter remains open before the Italian Supreme Court and Telit does not expect it will be heard before 2022. Telit intends to defend its position that the VAT assessments should be annulled," it said.

At 0950 GMT, the shares were down 1.9% to 157.90p.