ABC Arbitrage Reports on Tax Refund Update and Financial Impact

ABC Arbitrage Updates on Financial Matters

ABC Arbitrage has recently provided an update concerning paragraph 4.1 of the consolidated accounts within its annual financial report. The company has addressed a critical issue surrounding a tax refund request that has significant financial implications for the upcoming years.

Details of the Recent Communication

In alignment with Article 17 of the MAR regulation, ABC Arbitrage announced that on August 30, a communication was received from the Swiss Federal Tax Administration (AFC) regarding the company's subsidiary, Quartys Limited, regarding their withholding tax refund request. While the estimated negative financial impact for the first half of 2024 is relatively modest at €230K, the implications of this situation are notable.

Summary of Events

As highlighted in the annual financial report, specifically in paragraph 4.1, Quartys Limited is currently undergoing a review related to withholding tax refund requests submitted for the years spanning 2016 to 2019, extending through to 2023. Given the challenges surrounding the recovery of these amounts and the fluctuations in interest rates, the company has opted to reassess the receivable, leading to an anticipated direct effect on the results for 2023. The reassessment resulted in a significant adjustment, reflecting a decrease of €1.35M included within the line of "Net gains on financial instruments at fair value through profit or loss."

Content of the AFC Letter

The AFC has formally communicated its decision to Quartys Limited, acknowledging the company as the legitimate owner of the shares associated with the refund request. However, the AFC denied the refund claim for a total of 7.4 million CHF, equivalent to approximately €7.9 million, representing a slight reduction from previously reported figures. These developments are vital as they highlight the intricacies of tax rulings and their immediate financial implications for companies like ABC Arbitrage.

Looking Ahead: Next Steps for ABC Arbitrage

In response to the AFC's decision, ABC Arbitrage has reiterated its adherence to all applicable tax regulations. The company asserts confidence in the validity of its refund requests while preparing to contest the AFC's ruling. To bolster this position, a reputable Swiss tax law firm has been engaged, confirming that the original assessment of success remains optimistic.

Long-Term Implications

As previously indicated, the appeals process is expected to extend over several years, prompting ABC Arbitrage to apply a five-year discount on anticipated receivable amounts from the previous year. Consequently, the financial reports for 2024 are expected to incorporate an additional negative impact of €0.23M, cumulatively revealing anticipated impairments totaling €1.58M.

Future Communications Scheduled

The firm customarily updates stakeholders through regular communications, with the next disclosure anticipated on September 24 at 7:00 AM, focusing primarily on the first-half results for 2024. This commitment reflects ABC Arbitrage's dedication to transparency and keeping its investors informed of evolving situations.

Contact Information

For further inquiries, interested parties can reach out via the following channels:
Website: abc-arbitrage.com
Shareholder relations: actionnaires@abc-arbitrage.com
Press relations: VERBATEE / v.sabineu@verbatee.com

Frequently Asked Questions

1. What is the main issue that ABC Arbitrage is addressing?

The company is confronting the AFC's decision to deny a tax refund claim for Quartys Limited, affecting its financial results.

2. What does the AFC's decision entail?

The AFC acknowledged Quartys Limited as the legal owner but rejected the refund for CHF 7.4 million.

3. What financial impact has the company reported?

ABC Arbitrage anticipates a negative impact of €1.35M for 2023 and an additional €0.23M for the first half of 2024.

4. How is the company preparing for the future?

ABC Arbitrage engaged a Swiss law firm to seek external validation of the appeal and remains confident in its refund request process.

5. When can stakeholders expect the next financial update?

Stakeholders can look forward to a communication on September 24 regarding the first-half results for 2024.

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