Page 101 - Annual_Report_2016
P. 101
aia.gr Annual Report 2016
set for 31 May 2017 has been postponed for 6 December 2017 (refer to note 5.32). No provision has been
recognised based on Company’s and experts’ opinion by reference to the specific legislation governing its
tax affairs.
Value added tax
With respect to VAT, the Tax Authority questioned the right of the Company to set off the total VAT of all
fixed assets acquired and services rendered until 31 December 2015, 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 Law 2338/1995.
The Tax Authority disputed the above right of the Company to set off VAT, which corresponds to activities
not subjected to VAT, i.e. property leases, and proceeded to impose VAT –including penalties- for the fiscal
years 1998-2012 amounting totally to €167.8m, comprising of €46m capital and €145.8m surcharges.
The Company referred the issue, related to years 1998-2009, to the London Court of International
Arbitration, in accordance with Article 44 of the ADA. Pursuant to the final award of the London Court
of International Arbitration No 101735, which was issued on 27 February 2013, the relating acts of
determination had been issued in breach of law.
Alongside, the Company appealed before the competent Administrative Courts of Appeals against all
the acts of determination of the Tax Authority to impose VAT on such capital and operating expenses,
requesting the annulment of the tax assessments for all years from 1998 to 2012.
The Administrative Court of Appeals by its decisions, regarding the acts of determination for the years
2004-2009 amounting to €12.2m, rejected the appeals of the Company. The Company filed respective
annulment petitions before the Conseil d’Etat for the cassation of the decisions of the Administrative Court
of Appeals and the Conseil d’Etat by its Decisions, which were notified to the Company on 11 March 2015,
accepted the annulment petitions of the Company on the VAT disputes for the fiscal years 2004-2009
and referred-back the cases to the Administrative Court of Appeals. The hearing before the Administrative
Court of Appeals took place on 7 October 2015, which by its decisions finally accepted the Company’s
petitions and the VAT assessments for the fiscal years 2004-2009 were annulled. However, the Greek State
on 20 May 2016 filed annulment petitions against the latter aforementioned decisions in favour of the
Company before the Conseil d’Etat. The hearing date has been set for 3 May 2017.
Furthermore, regarding the assessments for the years 1998-2003 and 2010-2012, the juridical process
before the Administrative Courts of Appeal is as follows:
• For the fiscal years 1998-2003, which corresponds to VAT imposed on non-exempt expenses, such as,
entertainment and hospitality expenses amounting to €1.3m, the hearing took place at 7 April 2017,
apart for year 2002 where the hearing is set for 24 October 2017, and the decision is still pending.
• For the fiscal years 2001-2003, which corresponds to VAT imposed on the acquisition of fixed assets and
operating expenses amounting to €150.3m, the hearing is set for 24 October 2017.
• For the fiscal years 2010-2011, which corresponds to VAT imposed on the acquisition of fixed assets and
operating expenses amounting to €3.0m, the hearing took place at 10 October 2016 and by virtue of
decisions nos. 1665/2017 & 1666/2017 the Company’s appeals were fully upheld (refer to note 5.32).
• For the fiscal year 2012, which corresponds to VAT imposed on the acquisition of fixed assets and
operating expenses amounting to €1.0m, the hearing is set for 09 October 2017.
Based on the Company’s experts’ opinion by reference to the aforementioned final award of the London
Court of International Arbitration No 101735, no provision has been recognised for all above acts of
determination.
Property tax
With respect to property tax, the Tax Authority questioned the right of the Company to be exempted from
any property tax until 31 December 2015 as provided by paragraph 5 of article 26 of Law 2093/1992, in
conjunction with Articles 25.1.1 & 25.1.2 of the ADA. Further to the completion of tax audits on real property,
Financial Statements as at 31 December 2016 (Amounts in Euros unless otherwise stated)
54 of 57
set for 31 May 2017 has been postponed for 6 December 2017 (refer to note 5.32). No provision has been
recognised based on Company’s and experts’ opinion by reference to the specific legislation governing its
tax affairs.
Value added tax
With respect to VAT, the Tax Authority questioned the right of the Company to set off the total VAT of all
fixed assets acquired and services rendered until 31 December 2015, 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 Law 2338/1995.
The Tax Authority disputed the above right of the Company to set off VAT, which corresponds to activities
not subjected to VAT, i.e. property leases, and proceeded to impose VAT –including penalties- for the fiscal
years 1998-2012 amounting totally to €167.8m, comprising of €46m capital and €145.8m surcharges.
The Company referred the issue, related to years 1998-2009, to the London Court of International
Arbitration, in accordance with Article 44 of the ADA. Pursuant to the final award of the London Court
of International Arbitration No 101735, which was issued on 27 February 2013, the relating acts of
determination had been issued in breach of law.
Alongside, the Company appealed before the competent Administrative Courts of Appeals against all
the acts of determination of the Tax Authority to impose VAT on such capital and operating expenses,
requesting the annulment of the tax assessments for all years from 1998 to 2012.
The Administrative Court of Appeals by its decisions, regarding the acts of determination for the years
2004-2009 amounting to €12.2m, rejected the appeals of the Company. The Company filed respective
annulment petitions before the Conseil d’Etat for the cassation of the decisions of the Administrative Court
of Appeals and the Conseil d’Etat by its Decisions, which were notified to the Company on 11 March 2015,
accepted the annulment petitions of the Company on the VAT disputes for the fiscal years 2004-2009
and referred-back the cases to the Administrative Court of Appeals. The hearing before the Administrative
Court of Appeals took place on 7 October 2015, which by its decisions finally accepted the Company’s
petitions and the VAT assessments for the fiscal years 2004-2009 were annulled. However, the Greek State
on 20 May 2016 filed annulment petitions against the latter aforementioned decisions in favour of the
Company before the Conseil d’Etat. The hearing date has been set for 3 May 2017.
Furthermore, regarding the assessments for the years 1998-2003 and 2010-2012, the juridical process
before the Administrative Courts of Appeal is as follows:
• For the fiscal years 1998-2003, which corresponds to VAT imposed on non-exempt expenses, such as,
entertainment and hospitality expenses amounting to €1.3m, the hearing took place at 7 April 2017,
apart for year 2002 where the hearing is set for 24 October 2017, and the decision is still pending.
• For the fiscal years 2001-2003, which corresponds to VAT imposed on the acquisition of fixed assets and
operating expenses amounting to €150.3m, the hearing is set for 24 October 2017.
• For the fiscal years 2010-2011, which corresponds to VAT imposed on the acquisition of fixed assets and
operating expenses amounting to €3.0m, the hearing took place at 10 October 2016 and by virtue of
decisions nos. 1665/2017 & 1666/2017 the Company’s appeals were fully upheld (refer to note 5.32).
• For the fiscal year 2012, which corresponds to VAT imposed on the acquisition of fixed assets and
operating expenses amounting to €1.0m, the hearing is set for 09 October 2017.
Based on the Company’s experts’ opinion by reference to the aforementioned final award of the London
Court of International Arbitration No 101735, no provision has been recognised for all above acts of
determination.
Property tax
With respect to property tax, the Tax Authority questioned the right of the Company to be exempted from
any property tax until 31 December 2015 as provided by paragraph 5 of article 26 of Law 2093/1992, in
conjunction with Articles 25.1.1 & 25.1.2 of the ADA. Further to the completion of tax audits on real property,
Financial Statements as at 31 December 2016 (Amounts in Euros unless otherwise stated)
54 of 57
