Page 94 - Annual Report 2015 EN
P. 94
Financial Statements
Income tax
In accordance with Law 3808/2009 the Greek State imposed a “special once off tax surcharge” on the
profits generated by legal entities in fiscal year 2008. The Company was advised by the Tax Authorities
that it is liable to pay a special once off tax surcharge amounting to €23m which was higher by €9m
than the amount that should be paid in accordance with the provisions of the law and the tax privileges,
which have been granted by the ADA. Tax Authorities refused to modify the assessment of the once
off tax surcharge and Management proceeded with the legal actions to remedy the erroneous tax bill
referring the issue to the Administrative Court of Appeals on 18 February 2010. The hearing, set for 28
May 2013, took place on 17 December 2013, which by its decision 2896/2015 notified on 7 September
2015, rejected the appeal of the Company. The Company filed on 5 November 2015 respective
annulment petitions before the Conseil d’Etat for the cassation of the decision of the Administrative
Court of Appeals. No provision has been recognised based on Company’s and experts’ opinion by
reference to the specific legislation governing its tax affairs (refer also to note 5.14).
Value added tax
a) During 2005 a tax audit was performed by the Tax Authority 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 stipulated by article 26 paragraph 7 of Law 2093/1992, in
conjunction with Articles 25.1.1 & 25.1.2 (g) of the ADA as ratified by of Law 2338/1995. The Tax
Authority disputed the above right of the Company, and proceeded to impose VAT –including
penalties- for the fiscal 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 Court
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 03 April 2013 postponed the issuance of the final decisions
until the LCIA Arbitration Award be issued. The hearings, initially set for 17 and 20 February 2015,
were finally postponed for 3 June 2016 and 20 December 2016.
b) In addition, the Tax Authority issued a provisional VAT audit report, for the fiscal 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 by the Ministry of Finance, the Tax Authority proceeded with
the finalisation of the interim audit report imposing VAT –including penalties- for the fiscal 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 Administrative Court of
Appeals 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 the article 44 of
the ADA. The hearing of the case before the Administrative Court of Appeals took place on 17
December 2013, and the Court by its decisions 3140/2014, 3141/2014, 3142/2014 postponed the
hearing in view of the Dispute Resolution procedure, that had been omitted by the Tax Authorities
in accordance with the opinion of the Court. Upon the provision of the relevant clarifications,
given by the Tax Authorities to the Court, the hearing was set to take place on 20 December 2016.
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 fiscal years 2004-2009 imposing VAT –including penalties- for the
fiscal years 2004-2009 of €11.8m, which corresponds mainly to VAT on the acquisition of fixed
assets and operating expenses related to VAT exempt activities. The Company appealed to the
Administrative Court of Appeals 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 the article 44 of the ADA. The hearing of the case before the Administrative Court
of Appeals scheduled for 19 February 2013 took place on 17 December 2013 which by its decision
Financial Statements as at 31 December 2015 (Amounts in Euros unless otherwise stated)
51 of 56
Income tax
In accordance with Law 3808/2009 the Greek State imposed a “special once off tax surcharge” on the
profits generated by legal entities in fiscal year 2008. The Company was advised by the Tax Authorities
that it is liable to pay a special once off tax surcharge amounting to €23m which was higher by €9m
than the amount that should be paid in accordance with the provisions of the law and the tax privileges,
which have been granted by the ADA. Tax Authorities refused to modify the assessment of the once
off tax surcharge and Management proceeded with the legal actions to remedy the erroneous tax bill
referring the issue to the Administrative Court of Appeals on 18 February 2010. The hearing, set for 28
May 2013, took place on 17 December 2013, which by its decision 2896/2015 notified on 7 September
2015, rejected the appeal of the Company. The Company filed on 5 November 2015 respective
annulment petitions before the Conseil d’Etat for the cassation of the decision of the Administrative
Court of Appeals. No provision has been recognised based on Company’s and experts’ opinion by
reference to the specific legislation governing its tax affairs (refer also to note 5.14).
Value added tax
a) During 2005 a tax audit was performed by the Tax Authority 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 stipulated by article 26 paragraph 7 of Law 2093/1992, in
conjunction with Articles 25.1.1 & 25.1.2 (g) of the ADA as ratified by of Law 2338/1995. The Tax
Authority disputed the above right of the Company, and proceeded to impose VAT –including
penalties- for the fiscal 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 Court
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 03 April 2013 postponed the issuance of the final decisions
until the LCIA Arbitration Award be issued. The hearings, initially set for 17 and 20 February 2015,
were finally postponed for 3 June 2016 and 20 December 2016.
b) In addition, the Tax Authority issued a provisional VAT audit report, for the fiscal 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 by the Ministry of Finance, the Tax Authority proceeded with
the finalisation of the interim audit report imposing VAT –including penalties- for the fiscal 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 Administrative Court of
Appeals 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 the article 44 of
the ADA. The hearing of the case before the Administrative Court of Appeals took place on 17
December 2013, and the Court by its decisions 3140/2014, 3141/2014, 3142/2014 postponed the
hearing in view of the Dispute Resolution procedure, that had been omitted by the Tax Authorities
in accordance with the opinion of the Court. Upon the provision of the relevant clarifications,
given by the Tax Authorities to the Court, the hearing was set to take place on 20 December 2016.
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 fiscal years 2004-2009 imposing VAT –including penalties- for the
fiscal years 2004-2009 of €11.8m, which corresponds mainly to VAT on the acquisition of fixed
assets and operating expenses related to VAT exempt activities. The Company appealed to the
Administrative Court of Appeals 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 the article 44 of the ADA. The hearing of the case before the Administrative Court
of Appeals scheduled for 19 February 2013 took place on 17 December 2013 which by its decision
Financial Statements as at 31 December 2015 (Amounts in Euros unless otherwise stated)
51 of 56
