Date: 30 January 2020
Frasers Group Plc
("Frasers Group" or the "Company")
UPDATE ON BELGIAN TAX
In its Interim Results announcement of 16 December 2019, Frasers Group (previously Sports Direct International plc) provided an update on the status of the Belgian Tax Authority's queries regarding VAT. In particular, it was noted that the Belgian Tax Authority had confirmed in writing that it expected to complete its review of "Matter 1" early this year. Matter 1 accounts for €491m (or 73%) of the total €674m referred to in the "proces verbal". The Tax Authority has now confirmed in writing that it has completed its review of Matter 1 and that it is satisfied with the explanation provided. Accordingly, in respect of Matter 1, VAT has been correctly accounted for in Belgium, Matter 1 has been withdrawn from the proces verbal by the Belgian Tax Authority, and this aspect of the proces verbal has been resolved with no payment of VAT liabilities or associated penalties and interest to be made by the Company or any member of its group.
Also noted in the Interim Results announcement of 16 December 2019 was the discovery of some clerical reporting errors. These historical clerical reporting errors included the paying of VAT to the Tax Authority by a Frasers Group UK entity on goods shipped to a Frasers Group Belgian entity with a simultaneous reclaim of the same VAT by that Belgian entity. Due to EU 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.
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. Frasers Group management still believe that it is less than probable that material VAT and penalties will be due in Belgium as a result of the tax audit.
Ends.
