XXL ASA has received a reassessment from the Norwegian tax authorities relating to the group’s international transfer pricing model, leaving it owing nearly NOK 140 million. In its reassessment, the Norwegian tax authorities have increased the taxable income of XXL Sport and Villmark AS for 2015–2018, resulting in additional tax payable in Norway to the total amount of NOK 138,908,976.
In a press release, the company stated: “XXL does not agree with the reassessment and will also seek to mitigate the net tax effects for the XXL group by adjustments to taxable income in another jurisdiction through mechanisms in relevant double taxation treaties between Norway and such jurisdiction and which could lead to a refund from that jurisdiction.”
It added: “The company accordingly expects that the net tax amount payable by the group will be reduced to a significantly lower amount than that set out above. The company will, in addition, consider appealing the reassessment to the tax appeal board.”
The Company is in dialogue with the Norwegian tax authorities regarding postponed payment of the Norwegian tax amount until the tax amount has been finally determined.
The news comes just after XXL ASA, ahead of the Q2 reporting on July 14, warned of lower Ebitda, gross margin, and revenues for the period.
The retailer has received a temporary deferral on owed tax payments in Sweden, boosting its cash position by nearly €30 million. The tax payments will be made in monthly installments in 2024.
