Current Report No.: 42/2022
Date of preparation: 17.11.2022
Abbreviated name of the Issuer: CIECH S.A.
Subject: Information on the decision of the Head of the Podkarpackie Province Tax Office in Rzeszów.
Legal basis: Art. 17.1 of the MAR – inside information
Text of the report:
The Management Board of CIECH S.A. (the “Company” or “Issuer”) herewith informs that on 17 November 2022, the attorney of a subsidiary of the Issuer - CIECH Sarzyna S.A. (the “Subsidiary”) received the decision of the Head of the Podkarpackie Province Tax Office in Rzeszów of 4 November 2022 (the “Decision” and the “Authority” respectively) issued as a result of tax proceedings against the Subsidiary in the scope of auditing corporate income tax settlements for 2016.
In the Decision, the Authority questioned the settlements between Algete Sp. z o.o. and Ciech Sarzyna S.A. regarding Chwastox trademark, the right to tax loss on the sale of shares in Ciech Cerium Sp. z o.o. Sp. K and the right to settle the tax loss incurred in 2015 in connection with the Decision of the Head of the Podkarpackie Province Tax Office in Rzeszów issued on 19 November 2021, about which the Company informed in the current report number 37/2021 of 02.12.2021. While taking the activities challenged by the Authority, the Subsidiary used the services of professional advisers.
The Subsidiary and its advisers do not agree with this Decision. The Subsidiary intends to take procedural steps to defend the tax consequences of its 2016 operations.
The Decision for the amount of the tax liability of PLN 4.7 million is neither final nor enforceable. Nevertheless, the Subsidiary will consider the legitimacy of the payment of the amount specified in the Decision, and additionally late payment interest, which, as at the date of publication of this report, amount to approximately PLN 2.3 million, a total of approximately PLN 7.0 million (the “Tax Liability”), although it does not agree with the Decision.
As far as the right to settle the loss for a share in the Partnership which was questioned in 2015, tax disputes are also pending in the Subsidiary and in other subsidiaries of the Issuer for the year 2015, as advised by the Issuer in its current reports numbers: 22/2019 of 6.06.2019, 38/2019 of 9.09.2019, 49/2019 of 11.12.2019 and 12/2020 of 13.03.2020, 37/2021 of 02.12.2021 and 22/2022 of 01.06.2022, and the information on recognizing a provision (the “Provision”) and the write-down on the asset in connection with this matter was provided by the Issuer in its current report number 4/2019 of 27.06.2019. The Issuer informs that the Provision covers PLN 5.3 million of the Tax Liability, of which the Provision for the tax is PLN 3.6 million.
The description of the audit in the scope of the right to settle the loss due to the participation of five subsidiaries in the Partnership was presented in point 2.13 of the consolidated report of the CIECH Group for the first half of 2022 and was presented in periodic reports published by the Company in previous reporting periods.
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 persons representing the Company:
Jarosław Romanowski – Member of the Management Board
Kamil Majczak – Member of the Management Board
