11:12 09.11.2018

Fiscal service wants Naftogaz pay UAH 16.3 bln of VAT from amount won in Stockholm from Gazprom

2 min read
Fiscal service wants Naftogaz pay UAH 16.3 bln of VAT from amount won in Stockholm from Gazprom

National joint-stock company Naftogaz Ukrainy has received a tax notice about underreporting of VAT commitments for the amount of UAH 16.3 billion ($0.6 billion) in relation to the litigation won by the company against Russia's Gazprom in the Arbitration Institute of the Stockholm Chamber of Commerce over the gas transit contract, according to a draft offering memorandum for the company's eurobonds, a copy of which has been forwarded to Interfax-Ukraine.

Naftogaz objected to the conclusions of the tax audit, and as of the date of this securities offering memorandum, there was neither a revised decision of the tax authorities, nor changes in the company's position, the company said in the document.

Naftogaz explained that the Stockholm Tribunal awarded it $4.63 billion, of which $3.87 billion is compensation for losses, and $0.76 billion is the interest. According to the company, before 2016, the transit service was not subject to VAT, so the company paid UAH 4.75 billion of this tax only for compensation for 2016-2017, or $0.9 billion from the awarded $3.87 billion. However, the State Fiscal Service decided that the entire amount of compensation should be charged with VAT in 2018.

The draft document also refers to tax claims and to the Naftogaz's subsidiary Ukrtransgaz: about UAH 2.34 billion for VAT and income tax obligations and about UAH 1.57 billion (totally about $0.15 billion) for incorrect calculated losses. However, Ukrtransgaz challenged these tax conclusions in court.

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