Page 93 - Annual Report 2013
P. 93
Annual Report 2013
Value added tax:
a) 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 26.7 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 Court with its decisions of 3 April 2013
postponed the issuance of the final decisions until the LCIA Arbitration Award be issued and also ruled that
such award will be binding for Greek Courts.
b) 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
exempted from 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 exempted from 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 a) above, in accordance
with article 44 of the ADA. The hearing of the case before the Athens Administrative Court of First Instance
set for 28 May 2013, took place on 17 December 2013 while the decision is pending. No provision has been
recognised based on the final award of the London Court of International Arbitration No 101735, which was
issued at the favour of the Company on 27 February 2013.
c) Following the decision of the Ministry of Finance – as referred above under b) - 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 a) and b) above, in accordance with article 44 of the ADA. The hearing of the
case before the Athens Administrative Court of First Instance scheduled for 19 February 2013, took place
on 17 December 2013 and the decision is pending. No provision has been recognised based on the final
award of the London Court of International Arbitration No 101735, which was issued at the favour of the
Company on 27 February 2013.
d) Following a temporary tax audit performed in 2013 concerning the fiscal years 2010 and 2011, the tax
authority issued in 2013 a temporary VAT assessment for these years, amounting to €2,8m -including
penalties- which corresponds to VAT on the acquisition of fixed assets and operating expenses related to
VAT exempt activities. The Company duly appealed before the competent Dispute Resolution Department
of the Ministry of Finance and based on Company’s experts’ opinion by reference to the final award of the
London Court of International Arbitration No 101735, which was issued at the favour of the Company on 27
February 2013, no provision has been recognised.
Property tax:
a) Further to the completion of the temporary tax audit on real property for the years 2010, 2011 and 2012,
the tax authority issued in 2013 a real property tax assessment for these years, amounting to €12,2m
-including penalties. With respect to property tax, the Tax Authority questioned the right of the Company
to be exempted of any property tax until 31 December 2015 as provided by article 26.5 of Law 2093/1992,
Financial Statements as at 31 December 2013 (Amounts in Euros unless otherwise stated). 52 of 58
Value added tax:
a) 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 26.7 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 Court with its decisions of 3 April 2013
postponed the issuance of the final decisions until the LCIA Arbitration Award be issued and also ruled that
such award will be binding for Greek Courts.
b) 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
exempted from 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 exempted from 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 a) above, in accordance
with article 44 of the ADA. The hearing of the case before the Athens Administrative Court of First Instance
set for 28 May 2013, took place on 17 December 2013 while the decision is pending. No provision has been
recognised based on the final award of the London Court of International Arbitration No 101735, which was
issued at the favour of the Company on 27 February 2013.
c) Following the decision of the Ministry of Finance – as referred above under b) - 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 a) and b) above, in accordance with article 44 of the ADA. The hearing of the
case before the Athens Administrative Court of First Instance scheduled for 19 February 2013, took place
on 17 December 2013 and the decision is pending. No provision has been recognised based on the final
award of the London Court of International Arbitration No 101735, which was issued at the favour of the
Company on 27 February 2013.
d) Following a temporary tax audit performed in 2013 concerning the fiscal years 2010 and 2011, the tax
authority issued in 2013 a temporary VAT assessment for these years, amounting to €2,8m -including
penalties- which corresponds to VAT on the acquisition of fixed assets and operating expenses related to
VAT exempt activities. The Company duly appealed before the competent Dispute Resolution Department
of the Ministry of Finance and based on Company’s experts’ opinion by reference to the final award of the
London Court of International Arbitration No 101735, which was issued at the favour of the Company on 27
February 2013, no provision has been recognised.
Property tax:
a) Further to the completion of the temporary tax audit on real property for the years 2010, 2011 and 2012,
the tax authority issued in 2013 a real property tax assessment for these years, amounting to €12,2m
-including penalties. With respect to property tax, the Tax Authority questioned the right of the Company
to be exempted of any property tax until 31 December 2015 as provided by article 26.5 of Law 2093/1992,
Financial Statements as at 31 December 2013 (Amounts in Euros unless otherwise stated). 52 of 58
