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UPDATE 1-IPF says to appeal against Polish tax body decision
January 6, 2017 / 8:37 AM / a year ago

UPDATE 1-IPF says to appeal against Polish tax body decision

(Adds context, shares)

Jan 6 (Reuters) - Consumer credit lender International Personal Finance (IPF) said on Friday it would appeal against a decision by the Polish tax authority relating to the accounts of its Polish business, Provident Polska, for the 2008 financial year.

The company said the decision involved “a transfer pricing challenge relating to an intra-group arrangement with a UK entity”, as well as “a challenge to the timing of taxation of home collection fee revenues.”

Its shares were down 15 percent at 148.2 pence at 0813 GMT, the worst performance on FTSE mid cap index.

IPF, which provides small personal loans to over 2.7 million borrowers in Europe and Mexico, said it strongly disagreed with the interpretation of the tax authority and added that both items were accepted in previous audits by the same body.

“We will appeal the decision to the District Administrative Court and pay the amounts assessed (about 20 million pounds comprising tax and associated interest) which is necessary in order to make the appeal,” IPF said in a statement.

“The payment of this sum is not a reflection of our view on the merits of the case and accordingly it will be recognised as a non-current financial asset in our group,” it added.

IPF also said it expected a similar decision from the Polish Tax Chamber for the 2009 financial year, which would give rise to a similar liability.

The company has been hit by a string of regulatory changes and decisions in its markets.

In 2015, it said it was evaluating alternative business models for Slovakia after the country amended its consumer legislation, which was expected to hit its business there.

New credit laws in Poland, which came into effect in March 2016, added to its woes.

In February last year, IPF Chief Executive Gerard Ryan reiterated an earlier warning that regulatory changes in Poland and Slovakia would hurt the company’s profitability in 2016 and beyond. (Reporting by Rahul B in Bengaluru; Editing by Mark Potter)

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