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CORRECTED-Polish Eurocash falls victim to VAT fraud, may need to pay back tax
August 25, 2017 / 5:46 AM / a month ago

CORRECTED-Polish Eurocash falls victim to VAT fraud, may need to pay back tax

(Corrects paragraph 5 to read 52 million zlotys profit instead of loss)

WARSAW, Aug 25 (Reuters) - Polish retail and wholesale group Eurocash has been used in a Value Added Tax (VAT) fraud and may be obliged to refund the tax to the state, which will reduce the group’s 2017 profit by 114 million zlotys ($31.57 million), the firm said on Thursday.

“Eurocash has been cheated by a group of criminals dealing with VAT fraud,” Eurocash Management Board member Jacek Owczarek was quoted as saying in a statement.

Eurocash had notified the prosecutor about the suspicion that a crime was committed and had paid the tax office 95.7 million zlotys in security of payment of the potential VAT liability, he added.

Refunding the VAT would not impact day-to-day operations or dividend policy, but would weigh on 2017 results, the company said.

Eurocash posted a net loss of 63 million zlotys in the second quarter compared to a 52 million zlotys profit a year ago due to an impairment related to the tax issue.

The news comes at a time when the ruling conservative Law and Justice party (PiS) has stepped up actions aimed at more effective tax collection. ($1 = 3.6112 zlotys) (Reporting by Agnieszka Barteczko; Editing by Stephen Coates)

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