Sales tax refund claim procedures of subsidiaries of Tallinna Kaubamaja Grupp AS

On 11 August 2014, Tallinna Kaubamaja Grupp AS published a stock exchange announcement, in which it was announced that the subsidiaries of the company will be filing a claim for refund of the sales tax paid in Tallinn in the period from 1 June 2010 to 31 December 2011 in the total amount of 3.27 million euros.

The Administrative Court of Tallinn partially satisfied the claims filed by Selver AS and Kaubamaja AS against the tax assessment notices issued by the Tallinn Enterprise Department, taking the position that the tax assessment notices should be cancelled in the extent to which the sales tax was applied to the transactions, the object of which were excise goods (stock exchange announcement dated 27 July 2015). Selver AS and Kaubamaja AS appealed the administrative court ruling in the extent to which the claims were not satisfied (non-excise goods). The administrative court ruling was initially also appealed by the city of Tallinn, which found that it was legal to collect sales tax from excise goods. Now, the city of Tallinn has foregone appealing the administrative court ruling and adopted new decisions, by which the claim for refund of the sales tax from excise goods filed by Kaubamaja AS was satisfied in the total amount of 21 thousand euros and the claim filed by Selver AS in the total amount of 297 thousand euros. If a claim is filed, the city of Tallinn must, in addition to refunding the sales tax, pay an interest in the amount exceeding 124 thousand euros. The disputes regarding the sales tax refund claims filed by Kaubamaja AS and Selver AS with respect to non-excise goods are ongoing at the Tallinn Circuit Court.

The Administrative Court of Tallinn rejected the appeals filed by AS Viking Motors, AS TKM King, and OÜ TKM Beauty Eesti against the tax assessment notices issued by the Tallinn Enterprise Department, by which the Department refused to refund sales tax in the total amount of 210 thousand euros (stock exchange announcement dated 1 April 2015). The subsidiaries of Tallinna Kaubamaja Grupp AS appealed the administrative court ruling to the circuit court. By the ruling of 9 May 2016, the Tallinn Circuit Court rejected the appeal. The subsidiaries of Tallinna Kaubamaja Grupp shall analyse in more detail but shall probably file an appeal in cassation against the ruling of the Tallinn Circuit Court.