The Administrative Court of Appeal has notified a judgment that entails that Klövern will not be granted almost SEK 5 billion of loss carryforwards deriving from the time when the company was engaged in IT operations. However, a deduction of SEK 107 million for conversion of claims into shareholders’ contributions was approved.
According to the judgment, the Administrative Court of Appeal rejects loss carryforwards totalling SEK 4,947 million. This amount consists of two different amounts SEK 4,933 million and SEK 14 million. Both relate to capital loss when divesting subsidiaries in the tax assessment year 2003. The requests for a deduction have not been recorded in Klövern’s accounts. The Administrative Court of Appeal does not share the company’s view that the divestment of shares with a loss took place at a certain time, 6 December 2001, i.e. before the regulations were changed.
The Administrative Court of Appeal has now, in this judgment granted Klövern a deduction of SEK 107 million for conversion of claims to shareholders’ contributions. The value of the new loss carryforward will decrease Klövern’s tax by SEK 28 million in the future. The amount will be reported as a tax claim in Klövern’s books as at 30 September 2010.
The Company is considering an appeal against the Administrative Court of Appeal’s judgment in the part relating to the deduction for a capital loss of SEK 4,947 million. Klövern must decide upon that at the latest by 23 October this year.
“It is regrettable that the Administrative Court of Appeal has decided in favour of the Tax Agency. It is also surprising that civil law agreements are not given the same meaning in taxation. A positive outcome would have meant lower tax in the future. The negative outcome will thereby not affect us, our tax position is the same as before. The company will not pay any tax to talk about during the nearest years with present earning capacity”, says Klövern’s CEO Gustaf Hermelin.
“We think that it is possible that the Supreme Administrative Court will grant leave to appeal since the issue of what is a divestment of shares for tax purposes involves important issues of principle”, say the company’s attorneys Thomas Andersson and Börje Leidhammar.
The Administrative Court of Appeal has in a previous judgment quashed the Tax Agency’s request for a tax surcharge of around SEK 493 million for incorrect information relating to Klövern’s request for a capital loss deduction for the 2003 tax assessment year. However, the Tax Agency has appealed against the judgment of the Administrative Court of Appeal to the Supreme Administrative Court. The Supreme Administrative Court is expected to make a decision on whether to grant leave to appeal or not during the autumn of 2010.
Klövern’s attorneys are Thomas Andersson, Deloitte, and Börje Leidhammar, Wistrand advokatbyrå.
Nyköping, 23 August 2010
Klövern AB (publ)
For further information, please contact:
Gustaf Hermelin, CEO, +46 155-44 33 10/+46 70-560 00 00, email@example.com
Britt-Marie Einar, Finance and IR Manager, +46 155-44 33 12/+46 70-224 29 35,
Klövern is a real estate company committed to working closely with customers to meet their needs of premises and services in Swedish growth regions. Klövern has business units in ten cities: Borås, Karlstad, Kista, Linköping, Norrköping, Nyköping, Täby, Uppsala, Västerås and Örebro. As at 30 June 2010, the value of the properties totalled approximately SEK 12,1 billion and the rental income on an annual basis was SEK 1.4 billion. The Klövern share is listed on Nasdaq OMX Nordic Exchange in Stockholm for medium-sized companies.
Klövern AB (publ), Box 1024, SE-611 29 Nyköping, Sweden. Tel +46 155-44 33 00, Fax +46 155-44 33 22. Corporate registration no. 556482-5833. Registered office: Nyköping. Website: kelly.corem.se