Notice on the results of the tax inspection
The Management Board of Orzeł Biały S.A. (hereinafter: “The Company”, “The Issuer”) hereby notifies about the results of Tax Inspections carried out by the Head of the Subcarpathian Customs and Tax Office at Przemyśl (“The Office”, “The Authority”) for 2014 and 2015, with reference to the information provided in Cl. E. 2.6. Indication of significant proceedings (…), in the periodic 2018 Report published on 09.04.2019, on the initiation of customs and fiscal inspection regarding the reliability of the declared tax bases and the correctness of calculations and payment of the corporate income tax in 2014 to 2017.
In the opinion of The Authority, the inspected Company increased its tax deductible costs in 2014 by PLN 2.6 million resulting from a VAT invoice issued by Helidor sp. z o.o. for granting a license to use the copyrights to a trademark in 2013.
Therefore, in the settlement of the Company’s corporate income tax for 2014, The Issuer should have reported a tax loss of PLN 7.7 million instead of PLN 10.3 million.
Having examined the matter together with legal and tax advisers, The Issuer does not agree with this approach of The Authority and, therefore, finds no grounds to make corrections of the submitted tax return.
In the scope of the 2015 inspection, in the opinion of The Authority, The Issuer inflated the tax deductible costs by PLN 13.5 million, resulting from VAT invoices issued by Helidor sp. z o.o. for granting a license to use copyrights to a trademark in 2014 and 2015.
In the opinion of The Authority, in the settlement of corporate income tax for 2015, The Issuer should have reported the tax base in the amount of PLN 6.2 million instead of PLN 0, which would have resulted in the necessity to additionally pay a tax of PLN 1.2 million plus tax interest, which, as at August 21, 2019, amount to PLN 0.3 million.
Currently, The Issuer is, together with legal and tax advisers, analysing in detail the Inspection Results for 2015. At the same time, The Issuer is waiting for the Inspection Results for 2016 and 2017.
In order to apply due diligence, the Management Board of The Company, decided, having reviewed the Inspection Results for 2014 and 2015 jointly, to disclose this confidential information to the public at such an early stage. The Issuer cannot exclude that in the future the results of the customs and fiscal inspection may, with a decision unfavourable for the Company, affect the results of The Company.
The Issuer will examine in depth, together with tax and legal advisers, the Inspection Results received and will keep the public informed about further significant activities in this area in accordance with applicable regulations.
Legal basis: Article 17 Para. 1 MAR – Insider Information