Polish Lender to Appeal Against Tax Decision

Consumer credit lender International Personal Finance said on January 6 it would appeal against a decision by the Polish tax authority relating to the accounts of its Polish business, Provident Polska, for the 2008 financial year.

International Personal Finance is a British-based international home credit business. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. It took a secondary listing on the Warsaw Stock Exchange in March 2013.

The company said the decision involved “a transfer pricing challenge relating to an intra-group arrangement with a UK entity”, as well as “a challenge to the timing of taxation of home collection fee revenues,” Reuters reported Friday.

Its shares were down 15% at 148.2 pence at 0813 GMT, the worst performance on London’s FTSE mid cap index.

IPF, which provides small personal loans to over 2.7 million borrowers in Europe and Mexico, said it strongly disagreed with the interpretation of the tax authority and added that both items were accepted in previous audits by the same body.

“We will appeal the decision to the District Administrative Court and pay the amounts assessed (about 20 million British pounds comprising tax and associated interest) which is necessary in order to make the appeal,” IPF said in a statement.

  About Merits

“The payment of this sum is not a reflection of our view on the merits of the case and accordingly it will be recognized as a non-current financial asset in our group,” it added.

IPF also said it expected a similar decision from the Polish Tax Chamber for the 2009 financial year, which would give rise to a similar liability.

The company has been hit by a string of regulatory changes and decisions in its markets.

In 2015, it said it was evaluating alternative business models for Slovakia after the country amended its consumer legislation, which was expected to hit its business there.

New credit laws in Poland, which came into effect in March 2016, added to its woes.

In February last year, IPF Chief Executive Gerard Ryan reiterated an earlier warning that regulatory changes in Poland and Slovakia would hurt the company’s profitability in 2016 and beyond.