The Tax Agency has decided to impose a tax surcharge of SEK 493 million for Klövern's request for reconsideration of the tax assessment for 2003. This surcharge is being imposed despite Klövern having withdrawn its request for reconsideration in April 2006. Klövern is going to appeal against the Tax Agency's decision to the County Administrative Court. Furthermore, Klövern will submit a request for a new reconsideration of the tax assessment for 2003.
At the end of 2003, Klövern requested that the tax assessment for that year should be reconsidered. The intention was to have considered whether Klövern was entitled to additional tax loss carry forwards of SEK 5 billion due to a loss that the company, and indirectly the shareholders, had made in the previous business activity as an IT company.
In the process of the Tax Agency's consideration of the case, Klövern has supplemented its request for reconsideration with further information at the request of the Tax Agency. When the Tax Agency threatened to impose a tax surcharge on the grounds of insufficient information, Klövern withdrew its request for reconsideration in April 2006. Despite there not being any tax reduction claim to take a position on, the Tax Agency has now decided to impose a tax surcharge of SEK 493 million on Klövern.
"It is tough to be punished for asking a question. To be punished despite having withdrawn the question is horrible. Klövern's shareholders have de facto lost the five billion that is at stake here. It is indefensible not to try to recover this money for the shareholders in the form of tax loss carry forwards. We will appeal against the tax supplement to the county administrative court, says Klövern's CEO Gustaf Hermelin.
Klövern will already today, as well as appealing against the decision on a tax surcharge, also submit a renewed request for a reconsideration of the claim for a tax deduction. The tax surcharge of SEK 493 million imposed by the Tax Agency will not be paid or expensed as long as legal proceedings are taking place. The tax surcharge will therefore be reported as a contingent liability.
Klövern has established tax loss carry forwards and tax depreciation, in addition to book depreciation, totalling SEK 2,153 million for the tax assessment year 2004. Granted tax loss carry forwards and depreciation can be set off against future profits. With Klövern's present earning capacity, Klövern is not expected to be subject to current tax for the next five years.
"We consider that the Tax Agency has no legal grounds for imposing a tax surcharge on Klövern. We anticipate that the surcharge will be quashed in court proceedings", say Klövern's tax advisors Börje Leidhammar, Ernst & Young and Thomas Andersson, Deloitte & Touche".
Due to the decision from the Tax Agency Klövern is holding a press conference at Salénhuset, Norrlandsgatan 15 in Stockholm at 1.00 pm today.
Nyköping, 23 May 2006
Klövern AB (publ)
For further information, please contact:
Gustaf Hermelin, CEO, tel +46-(0)155-44 33 10, +46-(0)70-560 00 00, email@example.com
Britt-Marie Einar, Corporate Communications Officer, tel +46-(0)155-44 33 12, +46-(0)70-224 29 35,
Klövern is a real estate company with a local presence that actively develops properties in large Swedish cities outside the metropolitan areas. As at 31 March 2006, the value of the properties totals approximately SEK 6.1 billion and the rental income on an annual basis is approximately SEK 695 million. The Klövern share is listed on the Stockholm stock exchange, Stockholmsbörsen's O list.
Klövern AB (publ), Box 1024, SE-611 29 Nyköping, Sweden. Tel +46-(0)155-44 33 00,Fax +46-(0)155-44 33 22.
Company registration no. 556482-5833. Registered office: Nyköping.Website: www.klovern.se
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