Current Report No.: 4/2020

Date of preparation: 10.01.2020

Abbreviated name of the Issuer: CIECH S.A.

Subject: Decision to pay the tax liability

Legal basis: Art. 17.1 of the MAR - inside information

Report:

The Management Board of CIECH S.A. (hereinafter referred to as the “Issuer” or “CIECH”) herewith informs that today 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 “Cerium Finance”), in connection with 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), in which 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”) of 30 August 2019, defining the amount of the tax liability with respect to tax on goods and services for December 2014 in the amount of PLN 25,731,601, of which the amount of the disputed liability arising from the 1st Instance Decision is PLN 25,277,408 (the “Liability”), decided to pay the disputed Liability together with interest, which as at the date of publication of this report amounts to approx. PLN 10,011,000.

The Issuer informed about the Decision of the 2nd Instance in its Current Report No, 3/2020 of 7 January 2020.

The decision to pay the same amount of the disputed Liability once again was made as a result of an analysis of the Subsidiary's procedural situation and in order to avoid obligatory enforcement in connection with the negative position of the enforcement unit of the Kujawsko-Pomorskie Tax Office in Bydgoszcz obtained by the attorney for the Subsidiary, pertaining to the possibility of crediting the amount of paid VAT, paid as a result of correction/adjustment of VAT settlement for July 2018, submitted by the Subsidiary, towards the Liability arising from the Decision of the 2nd Instance and the interest due on such Liability.

As notified by the Issuer in the aforementioned current report, such VAT amount to be paid again should be recovered by the Subsidiary, at the latest, after the end of administrative and court proceedings, if any (for December 2014), or after the end of overpayment proceedings, if any, for July 2018.  

The Subsidiary and its advisers disagree with the Decision of the 2nd Instance and the negative position of the enforcement unit of the Kujawsko-Pomorskie Tax Office in Bydgoszcz. The Subsidiary and Cerium Finance obtained tax interpretations issued by the Director of the National Tax Information Office, which they have complied with, i.e. have already paid the amount of the Liability. The Subsidiary intends to lodge a complaint against the Decision of the 2nd Instance with 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 Company’s representatives:

Dawid Jakubowicz – President of the Management Board 

Mirosław Skowron - Member of the Management Board