Cemex to appeal tax consolidation law

Cemex to appeal tax consolidation law
Published: 07 December 2009

Cemex will appeal a new tax consolidation law that will further damage the company’s profits, Mexico City-based financial group IXE analyst Patricio Rivera told BNamericas.
 
The new law, which will take effect in 2010, means that all deferred taxes attributed to fiscal consolidation will have to be paid within a five-year period.
 
Under the existing law, companies can indefinitely consolidate losses, and taxes generated by those losses.
 
"It’s likely that the firm will appeal against these changes. They are retroactive, and you can’t pass a retroactive law that prohibits something that used to be legal," Rivera said.
 
"For Cemex, which currently finds itself strapped for cash and concentrating on debt repayments, this will have a significant impact," Rivera added.
 
Cemex said this week it expects to make a US$446m loss on the sale of its Australian operations to Switzerland-based rival Holcim, local press reported.
 
The sale was completed in January this year as part of an agreement to refinance some US$15bn of debt.