Statement regarding Belgian Tax Authority

RNS Number : 1055H

Sports Direct International Plc

29 July 2019

 

29 July 2019

SPORTS DIRECT INTERNATIONAL PLC

("Sports Direct")

Statement regarding Belgian Tax Authority

Sports Direct refers to its announcement of 26 July 2019 and the resulting press speculation regarding the chain of events in respect of the Payment Notice ("the Notice") from the Belgian Tax Authority referred to therein and received on 25 July 2019. The following describes, and corrects the press speculation regarding, the sequence of events:

·      The Notice was brought to Sports Direct's UK management's attention at approximately 12 noon on 25 July 2019. It referred to VAT, Penalties and Interest but provided no detail on how these figures had been arrived at or to what they related. It was therefore impossible for Sports Direct to interpret the reasoning behind the Notice at that stage.

·      Within 15 minutes of receipt, the Notice had been sent to one of our UK lawyers, RPC, and from RPC to Laga, the legal affiliate of Deloitte in Belgium. Laga support the Sports Direct group with this matter in Belgium.

·      A more detailed, 31 page, 'proces verbal', explaining the detail behind the Notice was received late on Thursday 25 July by Laga. A copy was sent to Sports Direct's UK management at approximately 11pm on 25 July 2019.

·      Sports Direct informed the Grant Thornton audit partner of this matter once the 'proces verbal' had been received late on 25 July 2019.

·      It was then necessary for Grant Thornton to satisfy themselves of Sports Direct's management's assessment of this matter before the audit could be completed.

·      It was this which led to the postponement of Sports Direct's announcement and related results presentation on 26 July 2019.

The management of Sports Direct would like to make it clear that the Notice and subsequent 'proces verbal' including the quantum were not expected.

As has often been stated, Sports Direct's accounting principles include being conservative. No provision or accrual in relation to this matter had been made in the Sports Direct group accounts prior to receipt of the Notice or the proces verbal and no provision or accrual was made when they were received. The Sports Direct management firmly believe that the points raised in the proces verbal, most of which relate to goods transported through Belgium, can be dealt with through the provision of further documents and information to the Belgian Tax Authority. Contact has already been made with the Belgian Tax Authority in order to deal with this matter.

Sports Direct is fully committed to working with the Belgian Tax Authority on this matter. The Sports Direct management has assessed the likelihood of the amounts referred to in the Notice being payable as not probable and accordingly believes that there is no requirement for a material provision or accrual to be made.

 Ends.

Sports Direct International plc Tom Piper, Company Secretary LEI: 213800JEGHHEAXIJDX34

T. 0344 245 9200 E. [e-mail]

 

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