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Albania To Appeal Decision On Bankers Petroleum's Tax Liability

by Ulrika Lomas, Tax-News.com, Brussels

25 October 2016


Albania's natural resources agency has decided to appeal against a recent arbitration ruling which came down in favor of Canadian firm Bankers Petroleum in its tax dispute with the Albanian Government.

The dispute centers on expenditure that the company offset against profit tax in 2011. The Albanian National Agency for Natural Resources (AKBN) is of the view that the expenditure was outside the scope of the company's Petroleum Agreement and License Agreement, and the country subsequently issued Bankers with a USD57m bill for back taxes. This was subsequently appealed by Bankers.

Bankers obtained a commitment from the AKBN to engage a third-party international auditor to resolve the tax dispute in September 2015.

The third-party audit was conducted by a joint panel of individuals from PricewaterhouseCoopers and Navigant Consulting Company, and according to an August 29 statement by Bankers, this panel determined that the company correctly stated its 2011 expenses as cost recoverable according to the Petroleum Agreement and the License Agreement.

According to Bankers, all parties committed to using the results of this third party audit as the basis for determining recoverable petroleum costs in subsequent years.

However, in an announcement on October 24, the AKBN said that it has decided to appeal the decision in the International Court of Arbitration after consulting with the Ministry of Energy and the State Advocacy.

The AKBN said that the issue remains "of public interest," adding that it is "convinced that the details found in the audit report, which were rejected by the experts, will be sufficient for [the International Court of Arbitration] to give the right to the Albanian state."

TAGS: individuals | court | Energy | tax | mining | interest | law | audit | Albania

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