The bill relates to the Group's acquisition of Kopin in January 2013.
Companies: IQE plc
Unfortunate news from the IQE (LON: IQE) camp this morning with Management announcing it has been whacked with an unexpected tax bill of approximately £4.2m plus interest.
The bill was recently discovered by an external tax firm employed by IQE to assist with a routine tax filing in the US for FY16.
It relates to the Group's January 2013 acquisition of Kopin, where an overseas subsidiary accrued unpaid taxes in the US between 2013 and 2016.
The bill is estimated at £4.2m plus £0.4m in interest, with the exact bill expected to be calculated in the coming weeks.
The news update this morning stressed the bill is only related to 2016 and it did not expect any tax liability to arise in 2017.
Management was understandably riled by the discovery, saying:
"IQE is clearly extremely disappointed with the previous professional advice received and will be pursuing full recompense as a matter of priority with the previous advisors."
The Board has now approved a complete tax review of the Group by an international tax firm.
Shares in IQE slipped 4% to 131p off the back of the announcement.
The Group reported Revenues of £132m in FY16, with the tax bill plus interest representing almost a quarter of its £19m Net Profit that year. It has a current Market Cap of £939m and trades at an earnings multiple of 36.
