Zabka grocer gets PLN 14.5 mln in CIT refund for 2018, hopes for rebates for 2019-2024

Zabka Group announced that having reviewed the written rationale of the non-appealable Supreme Administrative Court's (Polish: NSA) judgment on the individual tax ruling concerning tax law provisions governing the recognition of the debt financing costs as tax deductible costs of Zabka Polska and the outcome of tax proceedings conducted by the head of the First Mazovian Tax Office in Warsaw regarding the refund of the Zabka Polska's overpaid corporate income tax for 2018, the company identified a potential material positive impact on Zabka Polska's net financial result for 2025 and, consequently, on the group's consolidated net financial result.

"In 2018-2025, part of the debt financing costs incurred by Zabka Polska was recognised as tax non-deductible costs by the group. Considering the NSA judgment, the company believes that the recognition of these debt financing costs as tax-deductible is justified", Zabka said in the market filing.

This position is corroborated by Zabka Polska obtaining a reimbursement of the overpaid corporate income tax for 2018 in the amount of PLN 14.5 mln (EUR 3.4 mln).

The company said that, similarly to 2018, it planned to apply for a refund of overpaid corporate income tax for the non-expired years 2019-2024 and obtain the refund in line with the approach confirmed by the NSA judgement.

Zabka estimates the potential, joint impact of obtained refund of corporate income tax for 2018 and positive future approval of refund applications for 2019-2024 on the 2025 net financial result of Zabka Polska at approximately PLN 187 mln (EUR 44.1 mln), and in the same amount on the 2025 consolidated net financial results of the group.

In addition, the company believes that the NSA ruling will have a positive impact on future settlements of Zabka Polska in terms of determining the tax-deductible debt financing costs.

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