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4.31 Contingent liabilities
The Company has contingent liabilities comprising the following:
a. T he Company has not yet been audited by the Tax Authority for the fiscal years 2004 through to 2008.
Consequently, the tax liability with respect to the fiscal years 2004-2008 has not yet been finalized
yet. However, management does not expect any additional income taxes to be assessed in view of the
existence of significant assessable tax losses available for carried forward (Refer to note 4.25).
b. D uring 2005 a tax audit was performed by the Ministry of Economy and Finance for the fiscal years
1998-2003. Income tax and all other indirect taxes, except VAT, were levied and settled in 2006. With
respect to VAT, the Tax Authority questioned the right of the Company to set off the total VAT of all
goods purchased and services rendered, as provided by article 26 paragraph 7 of law 2093/1992, in
combination with articles 25.1.1 & 25.1.2 (g) of law 2338/1995 (the Airport Development Agreement).
The Tax Authority disputed the above right of the Company, and proceeded to impose VAT –including
penalties- for the years 1998-2003 of €1.872.638, which corresponds to VAT of non-exempt expenses,
such as, entertainment and hospitality expenses.
The Company appealed to the Athens Administrative Court of First Instance on 7 February 2006, against
the decision of the Tax Authority to impose VAT on such expenses. The case has not been scheduled
to be heard so far.
In addition, the Tax Authority issued a provisional VAT audit report, for the years 2001-2003, expressing
reservation with respect to the right of the Company to set off VAT, which corresponds to activities not
subjected to VAT i.e. property leases, without imposing any tax.
On this reservation, the tax auditors requested the opinion of the Ministry of Economy and Finance,
which however has not yet been given. No details of the possible extent of this contingency is disclosed.
The Company’s assessment, which is based on its experts’ opinion by reference to the specific legislation
governing its tax affairs, is that no significant liability will materialise.
c. There are a number of pending legal lawsuits against the Company amounting to approximately €6,3 million
(2007: €6,3 million) for which management, following consultation with its Legal Counsel, believes that
there is sufficient ground to successfully defend these claims. No provision for these claims has been
recognised in these financial statements on the basis that no material liability is expected to arise.
Financial Statements as at 31 December 2008 (Amounts in Euros unless otherwise stated)
4.31 Contingent liabilities
The Company has contingent liabilities comprising the following:
a. T he Company has not yet been audited by the Tax Authority for the fiscal years 2004 through to 2008.
Consequently, the tax liability with respect to the fiscal years 2004-2008 has not yet been finalized
yet. However, management does not expect any additional income taxes to be assessed in view of the
existence of significant assessable tax losses available for carried forward (Refer to note 4.25).
b. D uring 2005 a tax audit was performed by the Ministry of Economy and Finance for the fiscal years
1998-2003. Income tax and all other indirect taxes, except VAT, were levied and settled in 2006. With
respect to VAT, the Tax Authority questioned the right of the Company to set off the total VAT of all
goods purchased and services rendered, as provided by article 26 paragraph 7 of law 2093/1992, in
combination with articles 25.1.1 & 25.1.2 (g) of law 2338/1995 (the Airport Development Agreement).
The Tax Authority disputed the above right of the Company, and proceeded to impose VAT –including
penalties- for the years 1998-2003 of €1.872.638, which corresponds to VAT of non-exempt expenses,
such as, entertainment and hospitality expenses.
The Company appealed to the Athens Administrative Court of First Instance on 7 February 2006, against
the decision of the Tax Authority to impose VAT on such expenses. The case has not been scheduled
to be heard so far.
In addition, the Tax Authority issued a provisional VAT audit report, for the years 2001-2003, expressing
reservation with respect to the right of the Company to set off VAT, which corresponds to activities not
subjected to VAT i.e. property leases, without imposing any tax.
On this reservation, the tax auditors requested the opinion of the Ministry of Economy and Finance,
which however has not yet been given. No details of the possible extent of this contingency is disclosed.
The Company’s assessment, which is based on its experts’ opinion by reference to the specific legislation
governing its tax affairs, is that no significant liability will materialise.
c. There are a number of pending legal lawsuits against the Company amounting to approximately €6,3 million
(2007: €6,3 million) for which management, following consultation with its Legal Counsel, believes that
there is sufficient ground to successfully defend these claims. No provision for these claims has been
recognised in these financial statements on the basis that no material liability is expected to arise.
Financial Statements as at 31 December 2008 (Amounts in Euros unless otherwise stated)
