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Current Report No.: 39/2019

Information on the decision of the Head of the Małopolskie Province Customs and Tax Office in Krakow

Current Report No.: 39/2019

Date of preparation:
 11.09.2019

Abbreviated name of the Issuer: CIECH S.A.

Legal basis: Art. 17. 1 of the MAR – inside information

Subject: Information on the decision of the Head of the Małopolskie Province Customs and Tax Office in Krakow

Contents of the Report:

The Management Board of CIECH S.A. (hereinafter referred to as the “Issuer” or “CIECH”) informs that on 11 September 2019, the legal representative of a subsidiary of the Issuer - CIECH Soda Polska S.A. (hereinafter referred to as the “Subsidiary” or “CSP”), i.e. the legal successor of Cerium Finance Sp. z o.o. (hereinafter referred to as the “Cerium Finance”), received a decision (hereinafter referred to as the “Decision”) of the Head of the Małopolskie Province Customs and Tax Office in Krakow  (hereinafter referred to as the “Authority”) in connection with the tax proceedings conducted by the Authority against CSP as the legal successor of Cerium Finance with regard to the VAT settlement for December 2014 (hereinafter referred to as the “Proceedings”). The Authority challenged the right to deduct VAT from part of the contribution-in-kind (hereinafter referred to as the “Contribution”) made by CSP to the supplementary capital of Cerium Finance. Thus, the Authority sustained its findings expressed in the accounting book audit report, as informed by the Issuer in Current Report No. 26/2019 of 17 July 2019. 

The Subsidiary and its advisers disagree with the position of the Authority. Accordingly, the Subsidiary intends to appeal against the Decision. The Subsidiary's position is based, among others, on the fact that the Subsidiary and Cerium Finance obtained tax interpretations issued by the Director of the National Tax Information Office, which they complied with when settling the VAT correction in the month of receipt of the correcting invoice, i.e. July 2018, and not in its settlements for December 2014 as indicated by the Authority in the Decision. The Subsidiary paid the competent tax office, as part of VAT settlement for July 2018, the amount of PLN 25,277,408.00. If maintained, the unfavourable position against CSP of the 2nd instance authority may lead to the need to pay VAT once again, in the amount of PLN 25,277,408.00 due to VAT settlement for December 2014 together with interest due. The amount of VAT paid once again (in the event of an unfavourable decision of the 2nd instance authority) will be recovered by the Subsidiary, at the latest, after the end of administrative - court proceedings, if any (for December 2014), or after the end of overpayment proceedings, if any, for July 2018.


The amount of interest due, as at the date of publication of this report, is PLN 9,357,489.00. As a consequence, the consolidated cash flows and consolidated net result may be finally affected only by the amount of interest paid.

Legal basis: Article 17.1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on Market Abuse (the Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of the European Union L No. 173, p. 1).

Signatures of the persons representing the Company: 

Dawid Jakubowicz – President of the Management Board 

Artur Osuchowski – Member of the Management Board


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