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Financial Statements
5.29 Contingent liabilities
The Company has contingent liabilities comprising the following:
a) The Company has not been audited yet by the Tax Authority for the year 2010. Consequently, the tax liability with
respect to the fiscal year 2010 has not been finalized yet. However, management does not expect any additional
income taxes to be paid in view of the existence of significant assessable tax losses available for carried forward
(Refer to note 5.23). In accordance with the implementation of the Law 2238/1994 and Pol.1159/2011, years from
2011 onwards are audited by individual Certified Auditors and an “Annual Tax Certificate” will be issued upon the
completion of the tax audit. The Company has assigned a certified auditor to audit its tax obligations for the years
2011 and 2012 and the Certificate is issued to the Company in ten days after the date of filing of the corporate income
tax return to the competent Tax Authority. However management doesn’t expect any additional taxes to be paid since
the Company carries a significant amount of assessable tax losses.
b) During 2005 a tax audit was performed by the Tax Authority for the 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 €1.3m, 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 been
scheduled to be heard within 2013 (refer also to note 5.31).
c) 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 Authority requested the opinion of the
Ministry of Finance, which finally responded in 2010 considering that the Company has no right to set off the VAT
corresponding to activities not subjected to VAT in accordance with the general provision of the VAT Law (2859/2000)
and the 6th EU Directive. Following the response of the Ministry of Finance the Tax Authority proceeded with the
finalisation of the interim audit report imposing VAT –including penalties- for the years 2001-2003 of €150.3m, which
corresponds to VAT on the acquisition of fixed assets and operating expenses related to VAT exempt activities. The
Company appealed to the Athens Administrative Court of First Instance on 28 September 2010, against the decision
of the Tax Authority to impose VAT on such capital and operating expenses and also referred the issue to the London
Court of International Arbitration, together with the issue described in b) above, in accordance with the article 44
of the ADA. The hearing of the case before the Athens Administrative Court of First Instance has been scheduled
for 2013 while the arbitration process has initiated, in accordance with the time schedule agreed with the London
Court of International Arbitration, and the hearing took place in the first half of the year 2012. No provision has been
recognised, based on Company’s experts’ opinion by reference to the specific legislation governing its tax affairs,
since no significant liability is expected to materialise (refer also to note 5.31).
d) Following the decision of the Ministry of Finance – as referred above under c) - the Tax Authority proceeded with
the audit of the years 2004-2009 imposing VAT –including penalties- for the years 2004-2009 of €11.8m, which
corresponds to VAT on the acquisition of fixed assets and operating expenses related to VAT exempt activities. The
Company appealed to the Athens Administrative Court of First Instance on 21 October 2011, against the decision of
the Tax Authority to impose VAT on such capital and operating expenses and also referred the issue to the London
Court of International Arbitration, together with the issues described in b) and c) above, in accordance with the article
44 of the ADA. The hearing of the case before the Athens Administrative Court of First Instance has been scheduled
for 2013 while the arbitration process has initiated, in accordance with the time schedule agreed with the London
Court of International Arbitration, and the hearing took place in the first half of the year 2012. No provision has been
recognised, based on Company’s experts’ opinion by reference to the specific legislation governing its tax affairs,
since no significant liability is expected to materialise (refer also to note 5.31).
Financial Statements as at 31 December 2012 (Amounts in Euros unless otherwise stated) Page 49 of 54
5.29 Contingent liabilities
The Company has contingent liabilities comprising the following:
a) The Company has not been audited yet by the Tax Authority for the year 2010. Consequently, the tax liability with
respect to the fiscal year 2010 has not been finalized yet. However, management does not expect any additional
income taxes to be paid in view of the existence of significant assessable tax losses available for carried forward
(Refer to note 5.23). In accordance with the implementation of the Law 2238/1994 and Pol.1159/2011, years from
2011 onwards are audited by individual Certified Auditors and an “Annual Tax Certificate” will be issued upon the
completion of the tax audit. The Company has assigned a certified auditor to audit its tax obligations for the years
2011 and 2012 and the Certificate is issued to the Company in ten days after the date of filing of the corporate income
tax return to the competent Tax Authority. However management doesn’t expect any additional taxes to be paid since
the Company carries a significant amount of assessable tax losses.
b) During 2005 a tax audit was performed by the Tax Authority for the 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 €1.3m, 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 been
scheduled to be heard within 2013 (refer also to note 5.31).
c) 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 Authority requested the opinion of the
Ministry of Finance, which finally responded in 2010 considering that the Company has no right to set off the VAT
corresponding to activities not subjected to VAT in accordance with the general provision of the VAT Law (2859/2000)
and the 6th EU Directive. Following the response of the Ministry of Finance the Tax Authority proceeded with the
finalisation of the interim audit report imposing VAT –including penalties- for the years 2001-2003 of €150.3m, which
corresponds to VAT on the acquisition of fixed assets and operating expenses related to VAT exempt activities. The
Company appealed to the Athens Administrative Court of First Instance on 28 September 2010, against the decision
of the Tax Authority to impose VAT on such capital and operating expenses and also referred the issue to the London
Court of International Arbitration, together with the issue described in b) above, in accordance with the article 44
of the ADA. The hearing of the case before the Athens Administrative Court of First Instance has been scheduled
for 2013 while the arbitration process has initiated, in accordance with the time schedule agreed with the London
Court of International Arbitration, and the hearing took place in the first half of the year 2012. No provision has been
recognised, based on Company’s experts’ opinion by reference to the specific legislation governing its tax affairs,
since no significant liability is expected to materialise (refer also to note 5.31).
d) Following the decision of the Ministry of Finance – as referred above under c) - the Tax Authority proceeded with
the audit of the years 2004-2009 imposing VAT –including penalties- for the years 2004-2009 of €11.8m, which
corresponds to VAT on the acquisition of fixed assets and operating expenses related to VAT exempt activities. The
Company appealed to the Athens Administrative Court of First Instance on 21 October 2011, against the decision of
the Tax Authority to impose VAT on such capital and operating expenses and also referred the issue to the London
Court of International Arbitration, together with the issues described in b) and c) above, in accordance with the article
44 of the ADA. The hearing of the case before the Athens Administrative Court of First Instance has been scheduled
for 2013 while the arbitration process has initiated, in accordance with the time schedule agreed with the London
Court of International Arbitration, and the hearing took place in the first half of the year 2012. No provision has been
recognised, based on Company’s experts’ opinion by reference to the specific legislation governing its tax affairs,
since no significant liability is expected to materialise (refer also to note 5.31).
Financial Statements as at 31 December 2012 (Amounts in Euros unless otherwise stated) Page 49 of 54
