30th Jan 2020 10:41
(Alliance News) - Frasers Group PLC on Thursday said a tax dispute with authorities in Belgium has been partially resolved, without Mike Ashley's sportswear firm needing to pay a penalty.
Frasers, formerly Sports Direct International, said 'Matter 1', in respect of the dispute was "resolved with no payment of VAT liabilities or associated penalties".
Matter 1 was related to a potential EUR491 million charge, which makes up 73% of the whole EUR674 million referred to in the Belgian authority's 'proces verbal' payment notice.
The company, added that it is "less than probable that material VAT and penalties will be due in Belgium" as a result of the tax audit.
Frasers added: "Frasers Group and its advisers will continue to fully engage and work with the Belgian Tax Authority in order to resolve the smaller remaining matters referred to in the 'proces verbal' as soon as possible."
The dispute in Belgium is related to "historical clerical reporting errors". These included the paying of VAT by Frasers after one of its UK units shipped goods to a Belgian division.
Frasers added: "Due to European Union 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."
Shares in the company were 0.7% higher at 485.40 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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