Frasers says tax dispute in Belgium has been partly dropped
Mike Ashley’s retail group has said the Belgian tax authority has dropped its investigation against the company and declared itself satisfied with the retailer’s explanations.
Frasers Group, which recently changed its name from Sports Direct, clashed was in dispute over a €674m (£571m) tax bill. The dispute delayed the release of the company’s financial results by over eight hours, sending its share price down by almost 4% at the end of July.
On Thursday the group said the Belgian tax authority has concluded its investigation into ‘Matter 1’, worth €491m. This is the largest part of the contested tax bill, however more than €180m continue to be unaccounted for.
Frasers said it continues to work with the authority to resolve the smaller remaining matters, adding that it believes it is less than probable that material VAT and penalties will be due in Belgium as a result of the tax audit.
Additionally, the company provided more details about the “clerical reporting errors” revealed in the interim results announcement of 16 December. These errors involved a UK entity paying VAT to a Frasers Group Belgian entity, with the same Belgian subsidiary reclaiming it.
“Due to EU reverse charge rules, VAT should neither have been paid by the UK entity or reclaimed by the Belgian entity and, although the net result was that the correct amount of VAT due to the tax authority had been paid, the documentation provided and process followed were incorrect,” the group said.
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