Estonian businessman Igor Izraeljan who owns Technomar & Adrem which produces parquet floorboards, has won a court case against the tax authority and reclaimed a million euros from the tax service, Eesti Päevaleht reports.
The case dates back to 2007 when the tax autority claimed more than EUR 2.6m in additional income tax from Technomar.
The tax authority claimed that between 1993 and 2001, Technomar controlled and managed two offshore companies, one registered in the Isle of Man and the other in Utah, that purchased goods from third persons and re-sold it to Technomar & Adrem or vice versa.
According to the tax authority, the income earned by the two offshore companies was hidden profit of Technomar & Adrem.
When Technomar disputed the tax decision in court in 2008, the tax authority claimed an additional EUR 2.9m in interest from the company.
In July 2013, the administrative court abolished the tax claim and interest. Following the ruling, the tax authority reached a compromise agreement with Izraeljan under which they repaid the company EUR 1.3m that it had claimed from Technomar originally as well as EUR 2.9m for the interest claim.
In addition, the tax authority was ordered to pay Technomar EUR 1.6m in interest that was calculated since 2007 at a rate of 0.06% a day.
As part of the agreement, Technomar itself agreed pay the tax authority EUR 1.9m including 1.5m in interest.
All told, the tax authority repaid Technomar about a million euros.