IQE PLC Iqe Plc : Settlement Of Prior Year Taxes

 
TIDMIQE 
 
 
   Cardiff, UK. 20 October 2017: IQE plc (AIM: IQE, "IQE" or the "Group"), 
the leading global supplier of advanced wafer products and wafer 
services to the semiconductor industry, announces the settlement of 
prior years' tax liabilities. 
 
   The Group recently engaged the services of an international tax firm to 
assist with a routine US tax filing for the year ended 2016. 
Unexpectedly, this exercise has identified taxes due in the US relating 
to the profits of an overseas subsidiary for the years ending 2013, 
2014, 2015 and 2016, which follow the acquisition of the epitaxy 
business of Kopin in January 2013.  This firm has estimated the tax due 
as approx. GBP4.2m, and is in the process of calculating the actual 
amount, which may take up to 4 weeks.  IQE immediately initiated the 
payment of the estimated amount to the relevant tax authority, and will 
adjust any over/under payment in due course.  On the advice of this firm, 
IQE has also accrued interest due of up to GBP0.4m.  As a result of a 
Group re-organisation initiated in September 2016, but unrelated 
directly to this previously advised tax treatment, it is believed that 
no similar tax liability arises in 2017. 
 
   IQE has historically used a local independent firm of tax advisors for 
routine corporate tax filings, supplemented with the advice of larger 
firms of independent tax advisors for tax strategy, planning, and 
transactional work.  The original tax structuring of the acquisition of 
the Kopin epitaxy business was done in accordance with advice of a large 
mid-tier US legal and tax firm working in conjunction with IQE's local 
independent tax advisor.  IQE used the same local independent firm to 
complete the routine tax returns for 2013 to 2015, and supplemented this 
for 2016 with the international tax firm to bring expertise around the 
aforementioned restructuring. The same international tax firm has 
supported IQE with its transfer pricing compliance for the last four 
years, and in other ad hoc areas as necessary. 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 tax paid was previously unaccrued, and hence this will result in a 
prior year adjustment to the comparative figures in the next annual 
report.  There is no impact, or additional tax payable, on the expected 
trading results for 2017. 
 
   Whilst there are no indications of any further potential omissions, the 
Board yesterday approved the use of an international independent tax 
firm to undertake a complete IQE group tax review. 
 
   The Group has enjoyed a strong Q3 with continuing growth driven largely 
by the ongoing strong VCSEL ramp in support of a highly significant mass 
market consumer application, and the new Foundry expansion remains on 
course to open in H1 2018.  As a result, the Board remains confident the 
Group is on track to deliver full year expectations, including that of 
net debt. 
 
   The information contained within this announcement is deemed to 
constitute inside information as stipulated under the Market Abuse 
Regulations (EU) No. 596/2014. Upon the publication of this announcement, 
this inside information is now considered to be in the public domain. 
 
   CONTACTS 
 
   IQE plc [phone] 
 
   Drew Nelson 
 
   Phil Rasmussen 
 
   Chris Meadows 
 
   Canaccord Genuity + 44 (0) 20 7523 8000 
 
   Simon Bridges 
 
   Henry Fitzgerald O'Connor 
 
   Richard Andrews 
 
   Peel Hunt [phone] 
 
   Edward Knight 
 
   Nick Prowling 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: IQE plc via Globenewswire 
 
 
  http://www.iqep.com 
 

(END) Dow Jones Newswires

October 20, 2017 02:00 ET (06:00 GMT)

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