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Dubai Refreshment wins court case over tax issue
DUBAI- August 18, 2020: Dubai Refreshment Co (DRC)., the distributor of PepsiCo products, has said the First Instance Federal Court of Abu Dhabi has ruled in its favor related to the tax assessment and penalties case applied by the Federal Tax Authority. In a statement on Monday, it said the court rejected the case and obliged the plaintiff to pay the expenses and waive the fees.
It said the court canceled the objected decision and ruled again to cancel all administrative penalties. All other requests were rejected by the court who obliged the authority to pay the fees and expenses, DRC said in a statement posted on Dubai Financial Market, where it is listed.
Earlier, the Tax Dispute Settlement Committee in Dubai had also ruled in favor of the company.
Earlier, the FTA had contended the DRC owed it Dh20.8 million on the stock of drinks held by the company in 2017, prior to the introduction of VAT, which came into effect from January 1, 2018. The Committee had ruled that the company owed only Dh8.8 million in taxes to the Authority.
Dubai Refreshment posted Dh18.65 million net profit for the first half of 2020 as compared to Dh30.88 million for the same period last year, a loss of 39.6 percent. While the second-quarter profit shrank 83 percent from Dh18.68 million to Dh3.13 million due to the impact of coronavirus.
During the annual general meeting held on March 23, 2020, DRC shareholders approved and paid a cash dividend of Dh0.70 per share, totaling Dh63 million.