Appeals court affirms County Administrative Court’s ruling
Appeals court affirms County Administrative Courts ruling
Solna, Sweden, June 2, 2010
ICA has continuously provided information on a tax dispute concerning interest deductions for the period 2001-2003 in its interim and annual reports, among other places. The Swedish Administrative Court of Appeal has now affirmed the ruling of the County Administrative Court to deny ICA interest deductions of SEK 1,795 million. The tax claim amounts to SEK 747 million.
"The Court of Appeals ruling is naturally a disappointment to us. Together with our legal advisors, we feel that we have acted in compliance with existing laws. We will appeal the courts ruling to have the case heard, if possible, by the Supreme Administrative Court," said Per Behm, General Counsel for ICA AB.
In 2007, the Swedish Tax Agency denied interest deductions by ICA Finans AB of SEK 1,795 million for the period 2001-2003. ICA appealed the ruling to the County Administrative Court, which in December 2008 ruled in favor of the Swedish Tax Agency. The tax claim included penalties and interest. ICA paid the claim of SEK 747 million in February 2009 and booked it, at that time, as a receivable on the Swedish Tax Agency.
ICAs net income will be negatively affected by a tax expense of SEK 747 million in the second quarter, as a consequence of the Court of Appeals decision.
As of January 1, 2009 tax laws were changed for intra-group loans. When this law came in to effect, ICAs internal financing was adapted to the new law. ICA Groups total tax expense amounted to SEK 722 million in 2009, which corresponds to an effective tax rate of 31.3 percent.
For further information, please contact: ICAs press hotline, phone +46 70 253 66 60
----------------------------------------------------------------------------------------------------- About ICA The ICA Group (ICA AB) is one of the Nordic regions leading retail companies, with around 2,200 of its own and retailer-owned stores in Sweden, Norway and in the Baltic States. The Group includes ICA Sweden, ICA Norway, Rimi Baltic and ICA Real estate. ICA also offers financial services to Swedish customers through ICA Banken. ICA AB is a joint venture 40% owned by Hakon Invest AB and 60% by Royal Ahold N.V. of the Netherlands. According to a shareholder agreement, Royal Ahold and Hakon Invest jointly share controlling influence over ICA AB. Through Royal Ahold, ICA AB is part of an international retail network. For more information, please visit http://www.ica.se