The Stockmann Group has received tax reassessment decisions from the Finnish and Swedish tax authorities requiring the Group companies to pay 19.6 million EUR in additional taxes, including punitive tax increases and related interest.
Stockmann says in a statement it considers the decisions unfounded and will appeal against them.
In Finland, Stockmann plc received a tax reassessment decision from the Tax Administration relating to a tax audit which examined the market basis of interest rates in the Group’s internal financing. The company’s taxable income for 2009-2011 was increased by an amount equating to the difference between the interest charged as a transfer pricing adjustment and the market-based interest that accords with the view of the Tax Administration. Under the reassessment decision, the company is obliged to pay 10.3 million EUR in additional taxes, including interest, in January 2016. Stockmann will apply for a postponement to the payment.
In Sweden, Stockmann Sverige AB and AB Lindex received two reassessment decisions from the Tax Agency based on tax audits undertaken in the companies. The tax audits in AB Lindex examined the market basis of transfer prices in the Lindex Group’s internal business transactions during 2012 and 2013.
The decision concerning Stockmann Sverige AB is based on a change in Sweden’s tax legislation introduced at the start of 2013, which limited the tax deductibility of a Group’s internal interest payments. Under the reassessment decisions, the companies are obliged to pay in total 9.2 million EUR in additional taxes, including punitive tax increases and interest. The possible payment will take place only after the final decisions on the taxes have been made.
The total additional tax will be booked in the financial statements and result for 2015. Stockmann will apply for postponements to the payments until the final decisions about the taxes have been made.