Gielda Papierow Wartosciowych w Wrszw : Decision of a subsidiary to change the previously applicable tax policy and to adjust VAT payments

2017-01-25 09:27:12

Current Report No. 13/2017

Date: 25 January 2017

Subject: Decision of a subsidiary to change the previously applicable tax policy and to adjust VAT payments

Legal basis: Article 17 (1) of MAR - Inside information
Content:
The Management Board of the Warsaw Stock Exchange ('GPW', 'Company') announces that it was informed on 25 January 2017 by the Management Board of the Polish Power Exchange ('TGE'), a subsidiary of which GPW holds 100%, about a decision made by the TGE Management Board concerning a change of TGE's previously applicable tax policy regarding certain services and a concurrent correction of relevant value added tax ('VAT') payments.
In 2011 - 2016, TGE considered exchange fees charged on transactions concluded on the Property Rights Market, the Electricity and Gas Forward Market and for the maintenance of the Register of Certificates of Origin (jointly 'Fees') to be fees exempt from VAT.
The TGE Management Board has informed the GPW Management Board that following a tax review of TGE's VAT payments, it commissioned several independent third-party interpretations of tax regulations concerning VAT on exchange fees charged by TGE. Even in the absence of consistency of the received tax opinions, the Management Board of TGE has decided to change the previously applicable tax policy and to correct VAT payments relating to the Fees basing on the opinion that in the light of the VAT Act applicable as of 1 January 2011 TGE was not eligible to use the VAT exemption for charged Fees.
Furthermore, TGE has informed the Management Board of GPW that its previous approach where the Fees were considered to be exempted from VAT was based on a different interpretation of tax regulations. In the opinion of TGE they could lead to different interpretations as to the scope and method of their application, and that TGE's previous approach relied on the opinion of an independent advisor which suggested that a VAT exemption could apply to the Fees.

Further to the foregoing, the TGE Management Board has decided to change the previously applicable tax policy as of 1 January 2017 and to correct VAT payments which are not overdue. The decision requires the issuance of correction invoices to TGE's counterparties, requesting them to pay the VAT not previously charged for tax liabilities which are not overdue as a result of the Fees (for the period from December 2011 to December 2016, inclusive) in the total amount of PLN 69.8 mn.

At the same time, TGE will be required to pay to the account of the tax office an amount of the resulting tax debit under correction invoices to be issued to TGE's counterparties and additionally the interest on the tax debit at PLN 10.2 mn.

As a rule, counterparties should be entitled to deduct the VAT, i.e., the entire amount of the correction invoices, in the current or future financial periods.

According to estimates, the final cost of the correction of TGE's invoices will be the interest cost on the debits at PLN 10.2 mn.

Legal basis: Article 17 (1) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (EU Legal Journal L 173) ('MAR').

Signatures of persons representing the Company:
Paweł Dziekoński - Vice President of the Management Board
Dariusz Kułakowski - Member of the Management Board

back to report list ›