Record TL 3.76 billion tax fine jolts Doğan
Posted by meb at September 8th, 2009
Doğan Yayın Holding, Doğan Group’s conglomerate in the publication business that runs newspapers like Hürriyet, Milliyet, numerous magazines and TV channels, sustained the record amount of tax fine, the highest ever imposed on a Turkish company
The Finance Ministry inflicted a grueling fine of TL 3.76 billion ($2.53 billion) to the company for evading tax regarding its accounts for a time period covering 2005, 2006 and 2007.
The harsh blow of the record fine was due to the findings of investigations by controllers that the Doğan companies concealed the profits that stemmed from the share transfers among the partners and avoided to pay the Corporate Tax and Value Added Tax (VAT) on the revenues from the share transfers.
The investigation reports also asserted that the fines didn’t include the penalties for delaying the payments of these debts, which will later be calculated and added to the total amount. The calculation of the delay penalty will start from 2005 and will cover the time period until the projected time of the clearance of the debts. This is estimated to create a tremendous cost on the company considering that the rate of default penalty is monthly 2.5 percent for 2009 alone.
Doğan Holding will be able to negotiate with the Finance Ministry officials to ask for a discount in the amount of the fine as the door of conciliation is left open. The company has 30 days to open a lawsuit for the cancellation of the fine and for initiating negotiations for solving the tax dispute.
Doğan Yayın’s initial reaction was to blame the Finance Ministry officials of acting discretionary against the group and of assessing the laws incorrectly.
The company sent an written statement yesterday to the Public Disclosure Platform to announce that the Finance Ministry Revenues Controllers notified the results of 15 Tax Investigation Reports — bearing the dates of August 10 and August 25 on their covers — at the evening hours of Monday to the Doğan TV Holding, D Yapım Reklamcılık ve Dağıtım, Doğan Prodüksiyon Hizmetleri and Alp Görsel İletişim Hizmetleri, which are all Doğan Yayın Holding companies.
The statement summarized the investigation reports saying that the Finance Ministry inflicted a round figure of TL 3.76 billion fine, embodying TL 1.88 billion as the tax arrears, another TL 1.88 billion as the fine for the tax evasion, TL 60,000 for irregularities and TL 282,173 for special irregularities.
Doğan Yayın Holding accused in its statement the Finance Ministry’s controllers to weigh their personal evaluations while conducting the investigations rather than “generally accepted approaches. It also claimed that the controllers proposed such conditions that are not included in the Corporate Tax Law while performing the investigations.
The written statement, carrying the signatures of the Holding’s Board Member Soner Gedik and the Coordinator Murat Doğu, defended that all the transactions and share transfers were totally in accordance with the current laws and that the tax fine was manifestly wrong.
source: Today’s Zaman
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