The subsidiaries of Tallinna Kaubamaja AS (Selver AS, Kaubamaja AS, AS TKM King, AS Viking Motors and OÜ TKM Beauty Eesti) will apply for refunds of sales tax paid from 2010 to 2011.
Sales tax was in force in Tallinn as a local tax from 1 June 2010 to 31 December 2011. Within this period, the subsidiaries of Tallinna Kaubamaja AS paid sales tax in the total amount of 3.27 million euros, with Selver AS paying 2.20 million euros, Kaubamaja AS 0.86 million euros, AS TKM King 0.14 million euros, AS Viking Motors 0.04 million euros and OÜ TKM Beauty Eesti 0.03 million euros as sales tax. The tax was abolished by an act adopted by Riigikogu, and since then, several undertakings have claimed for a refund of the paid sales tax due to it being in violation of both Estonian and European Union legislation. To our knowledge, none of these disputes has insofar reached a final resolution.
In order to apply for a sales tax refund, we have submitted amended sales tax declarations, whereupon the City Enterprise Board initiated inspection procedures of refund claims. As a result of the inspection procedure, the City Enterprise Board delivered notices of assessment by which the refund claims were only partially satisfied. The City Enterprise Board deemed sales tax refund claims substantiated in the total amount of 0.05 million euros, including 0.04 million euros for Selver AS and 0.01 million euros for Kaubamaja AS.
The subsidiaries of Tallinna Kaubamaja AS have filed or are about to file appeals to the Tallinn Administrative Court against the notices of assessment delivered by the City Enterprise Board.
Subsidiaries of the Tallinn Kaubamaja AS group are advised and represented in the sales tax disputes by Attorneys-at-law Borenius. The subsidiaries of the Tallinn Kaubamaja AS group will incur no running costs in connection with the sales tax dispute; according to the agreement, fees will be paid according to the results of the dispute. Since, in this case, similar final resolutions are not known, no assessment can be made as of yet about the possible effectiveness of the dispute or the time of the final resolution of the refund claims, but the subsidiaries of Tallinna Kaubamaja AS have certainly not undertaken a dispute they would consider hopeless.
Tallinna Kaubamaja AS shall inform the stock exchange of relevant court rulings and decisions related to the refund claims of sales tax in accordance with the procedure laid down in the rules and regulations of the stock exchange.
Raul Puusepp
Chairman of the Board
Phone: +372 731 5000