The South African Revenue Service (SARS) is bringing the heat on Adidas due to an alleged puzzling R1.9 billion bill of unpaid taxes related to customs duties.
Business Day reports that SARS has taken action against both Adidas International Trading in Switzerland and its South African subsidiary, alleging tax underpayments over an eight-year period until 2013.
In June 2018, SARS issued a ruling demanding payment for customs, along with interest and penalties, for the period spanning from 2007 to 2013.
Furthermore, according to reports from News24, Adidas stated in its 2022 annual report that it was in “dispute with the local revenue authorities in South Africa with regard to the customs value of imported products”.
The report further states that Adidas has applied for a suspension of the payment request and has also filed a lawsuit in 2019 challenging the decision in the high court.
The company further stated that if SARS were to receive a ruling in their favour, they would proceed to file an appeal in the Supreme Court of Appeal.
“Based on external legal opinions, management currently believes that it is more likely than not that the claim made by SARS will eventually not result in an outflow of resources. Therefore, a provision was not recognised in the consolidated statement of financial position,” the sportswear company said.
sources: Business Day and News24.
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