Pandora to pay $151 million in tax settlement

Danish jewelry maker Pandora will pay 995 million Danish crowns ($151 million) to the Danish tax authorities, Skat, in a settlement after a transfer pricing audit for 2009 to 2014, it said on Thursday.

Pandora also said its reported tax rate for 2015 is expected to be around 22 pct compared to a previously guided 20 percent.

“Skat and Pandora did not agree on the applicable pricing methodology within the group,” the company said in a statement. “Following a dialogue with Skat, Pandora has decided to make a settlement whereby, Pandora will recognize a higher proportion of the group’s profit in Denmark”.

The settlement will have no impact on Pandora’s ongoing share buyback program or any planned capital expenditures, it said.

The company had already in December put 610 million crowns aside to these specific payments.

Pandora’s share was 0.9 percent lower at 672 crowns at 0750 GMT while the Danish benchmark index was 0.6 percent down.

“Of course Pandora would rather not have to pay this amount in tax, but the settlement does not change the company’s strong fundamental business case,” said Sydbank analyst Soren Lontoft Hansen, who has a ‘buy’ recommendation on the share.