INA to pay large retroactive tax debt, looses property in Serbia
Croatian oil and gas company INA must pay € 44.3 million in additional taxes for 2010 and 2011. Croatian tax administration rejected INA's appeal for formal reasons, for untimely or late submission of one day. This case involves the retroactive tax obligations. After tax review, conducted during the former Finance Minister Slavko Linic, the tax administration found that INA showed greater losses in processing than is usual in the refining business. The company also expressed and unrealistic own consumption.
INA, which is partialy, 49.08% of its shares, owned by Hungarian company MOL, responded to the Tax Administration that this decision will jeopardize its investments. The company will take all available legal steps to challenge the decision on untimely appeal, INA said in a press release.
'We reiterate that INA calculated its tax liability in accordance with best business practices and relevant regulations, applying the International Accounting Standards. Therefore, INA considers the assessment methodology of the Tax Administration in the disputed decision is unfounded.', wrote reported INA's public relations service.
INA criticized Tax Administration in this particular case, but also in general opinion, saying it will contribute to uncertain investing climate in Croatia, especialy modernization of INA's refinery in Rijeka.
'Decisions about additional retroactive tax liabilities, together with unpredictable regulatory framework, make it difficult for business and investment opportunities. In the context of the refinery that is especially true in cases like financialy demanding and complex investments such as the construction of wastewater treatment plants for heavy residues in Rijeka Refinery.', claims INA.
A similar decision Ministry of Finance has issued in 2013 for operations in 2008 and 2009, when INA complained on the Administrative Court.
However, as daily Jutarnji list reports, INA has already requested an internal investigation of this case, which shows week business practice. Exceeding the limits for appeal might be difficult to be explained, and it is quite indefensible. It is expected that MOL could raise the question of responsibility of management structures, including their own representatives who control the complete management of Croatian oil company, assumes Jutarnji list.
Recently, INA admitted it lost legal battle for 167 gas stations and 11 warehouses in Serbia, where Higher Commercial Court in Belgrade, June 18th 2014, dismissed the request of INA to annul the contract for sale of this property to Russian "Lukoil".
The gas stations and warehouses are estimated at € 200 million, and after the collapse of Yugoslavia, this property continued to use the company "Beopetrol" which was sold to "Lukoil" 2003. Thereafter, INA initiated a case before the Commercial Court in Belgrade, which ended last year, but without informing the public on that untill now.
'INA has initiated proceedings for annulment of the contract between the Privatization Agency and the Share Fund of the Republic of Serbia, 2005, on the one hand, and "Lukoil Europe Holdings" and "Lukoil International GmbH", on the other hand. The case was before the Commercial Court in Belgrade, and INA finally have lost it.', reported INA for Croatian media.