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Current Report No. 43/2019

Decision of the Head of the Małopolskie Province Customs and Tax Office in Krakow.

Current Report No.: 43/2019

Date of preparation:
 24.10.2019

Abbreviated name of the Issuer: CIECH S.A.

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

Subject: 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 “Company” or “Issuer”) informs that today, the attorney for a subsidiary of the Issuer - Verbis ETA sp. z o.o. S.K.A. (the “Subsidiary”) received the decision of the Head of the Małopolskie Province Customs and Tax Office in Krakow (hereinafter referred to as the “Decision of the 2nd instance” and the “2nd Instance Authority” respectively) dated 11 October 2019. Following an appeal submitted by the Subsidiary, the 2nd Instance Authority upheld the decision of the Head of the Małopolskie Province Customs and Tax Office in Krakow (hereinafter referred to as the “1st Instance Decision” and the “1st Instance Authority” respectively) dated 9 July 2019, defining the amount of the tax liability in the form of tax on goods and services for the fourth quarter of 2013 – i.e. PLN 37,893,505, of which the amount of the disputed liability arising from the 1st Instance Decision is PLN 30,775,122.00 (the “Liability”). 

The 2nd Instance Decision is due and payable. The amount of the Liability has already been paid to the competent tax office in connection with the immediate enforceability of the Decision of the 1st Instance, as advised by the Issuer in its Current Report No. 36/2019 of 29 August 2019. 

Furthermore, the Issuer informed about the pending proceedings in its current reports:

  1. No. 17/2019 of 22 May 2019 
  2. No. 26/2019 of 17 July 2019
  3. No. 31/2019 of 6 August 2019 

In addition, the Issuer informed about the pending proceedings and the amount of the potential tax liability in the consolidated statements of the CIECH Group. In the extended consolidated financial statements of the CIECH Group for the first half of 2019, these proceedings are described in Note 2.13 in the section “Audits of tax settlements in the CIECH Group” in the paragraph “VAT audit for the fourth quarter of 2013 at VERBIS ETA Sp. z o.o. S.K.A."

The Subsidiary and its advisors disagree with the approach expressed in the 2nd Instance Decision. The Subsidiary intends to take further procedural steps in order to defend the tax consequences of its 2013 operations by submitting a complaint to the Provincial Administrative Court in Krakow. 

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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