Solna, Sweden – ICA has previously released information, including in its interim and annual reports, on a tax dispute concerning interest deductions for the period 2004-2008. The Administrative Court of Appeal has now affirmed the Swedish Tax Agency’s decision to deny ICA interest deductions of some SEK 3.4 billion and in addition imposes a tax surcharge for assessment year 2007. The total tax claim amounts to some SEK 1.3 billion, whereof ICA already paid close to SEK 1.2 billion in January 2011. The tax expense will be reported in the third quarter.
We note that the Administrative Court of Appeal affirms the Swedish Tax Agency’s ruling. We will analyze the decision before deciding if a request for leave to appeal to the Supreme Administrative Court will be made, says Per Behm, General Counsel at ICA AB.
New rules introduced on January 1, 2009 limit deductions for intra-Group loans. Since then ICA has adapted its internal financing structure. The ICA Group’s tax expense amounted to SEK 761 million in 2011, corresponding to an effective tax rate of 35.3 percent.