JKX wins two more court battles, worth USD 4.5 mln in tax claims

JKX Oil & Gas (JKX LN) reported on Mar. 27 that
its two latest victories have been finalized – in their court battles against
the State Tax Administration – for a total tax claim and penalties of USD 4.5
mln. Following the rulings of second-tier courts on the two cases in favor of
JKX in November 2019, the tax authorities declined to appeal them in the
Supreme Court. These were the third and fourth cases (out of eight related to
2015 tax dispute) won by JKX in the courts, with the rest still ongoing.

Recall, JKX underpaid its production taxes in 2015 by
USD 12.7 mln, which tax authorities demanded later from the company, together
with penalties worth USD 20.8 mln as of end-1H19.

Alexander Paraschiy: We calculate the total savings by JKX from the four won cases amounts
to USD 7.3 mln. As the company has managed, so far, to win all the cases
against tax authorities surrounding the 2015 dispute, these conclusions boost
the chance that the rest of the cases will also end in favor of the company.