The subsidiaries of Tallinna Kaubamaja AS, Selver AS, Kaubamaja AS, AS Viking Motors, Kia Auto AS, Tallinna Kaubamaja Kinnisvara AS, Tartu Kaubamaja Kinnisvara OÜ and OÜ TKM Beauty Eesti, will apply for refunds of advertisement tax paid from June 2011 to July 2014.
Advertisement tax was a local tax paid by natural and legal persons on advertising and announcements installed on public transport vehicles owned by natural and legal persons residing and located in the territory of the local government. In this period, subsidiaries of Tallinna Kaubamaja AS group paid a total of 550,000 euros in advertisement tax. The advertisement tax regulation is, in our opinion, unconstitutional and in violation of the Supreme Court’s judicial practice in the part where it gives the local government basically unrestricted authority in establishing significant elements of a tax relationship.
In order to apply for an advertisement tax refund, we submitted amended advertisement tax declarations, whereupon the Tallinn City Enterprise Board, the Treasury Department of the Tartu City Government, and the Financial Management Service of the Pärnu City Government initiated refund claim verification procedures. As a result of the verification procedure, the Tallinn City Enterprise Board and the Treasury Department of the Tartu City Government have to date delivered notices of assessment by which the refund claims were denied.
Today, on 25 August 2014, the subsidiaries of the Tallinna Kaubamaja AS group, are filing appeals to the Administrative Courts of Tallinn and Tartu against the notices of assessment delivered by the Tallinn City Enterprise Board and the Finance Department of the Tartu City Government. In case the claim for refund in Pärnu will be denied by the decision of the Financial Management Service of the Pärnu City Government, the respective notice of assessment is planned to be challenged at the Pärnu Courthouse of the Tallinn Administrative Court.
Subsidiaries of Tallinna Kaubamaja AS group are advised and represented by attorneys-at-law Sorainen in the advertisement tax disputes. Except for the state fees, the subsidiaries of Tallinna Kaubamaja AS group will not incur any running costs in connection with the advertisement tax dispute; based on 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 result 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 will keep the stock exchange informed of relevant court rulings and decision related to the refund claims of advertisement tax in accordance with the procedure laid down in the rules and regulation of the stock exchange.
Raul Puusepp
Chairman of the Board
Phone: +372 731 5000