An end to long-running tax cases against Samherji has been reached, with the fishing and fish-processing company and its associates agreeing to settlements with Iceland’s Revenue and Customs Office.
In a statement, Samherji confirmed its settlement involved the reimposition of tax on companies in its group for the operating years 2012 through 2018. Simultaneously, Iceland’s District Prosecutor has dropped criminal charges against the companies and their employees related to unpaid taxes. Also, the managers and employees of the companies in question were found to have not committed criminal offenses with regards to unpaid taxes.
“Three years ago, very serious accusations were made against us regarding tax evasion and money laundering, which were said to amount to billions of ISK. It has now become evident that those accusations were unfounded, and our tax cases have been closed with criminal charges being dropped and a new assessment of our taxes, as is common in cases where there are disputes about the interpretation of taxability," Samherji CEO Thorsteinn Már Baldvinsson said.
Following the investigations into the Samherji’s accounting and tax returns for the years 2010-2018, the company will pay an additional tax of ISK 60 million (USD 421,470, EUR 388,824) due to revenue taxes and social security contributions for some crewmembers on foreign vessels. During that period, it paid just over ISK 30.1 million (USD 210,735, EUR 194,412) million in taxes.
Additionally, the company Sæból fjárfestingarfélag, an affiliate of Samherji, will pay ISK 153 million (USD 1.1 million, EUR 991,546) in additional tax after the government’s finding that the company’s foreign income was considered taxable in Iceland, even though that revenue was never actually paid.
The tax issues stem from Samherji's involvement in the so-called "Fishrot" scandal, in which it allegedly paid bribes to Namibian officials in exchange for access to quota in the African nation's exclusive economic zone. According to Icelandic news site Kjarninn, profits from Samherji's Namibian operations were transferred to a subsidiary in Mauritius, and then on to low-tax country of Cyprus, where Samherji has had minimal operations, and finally on to Iceland. A law passed in Iceland in 2010 requires Icelandic companies to pay income tax in Iceland on all profits of firms owned by Iceland citizens located in low-tax countries, Kjarninn reported.
Samherji said there was “significant legal uncertainty” about this aspect of the case, which was recently resolved by a ruling from the Icelandic Court of Appeals (Landsréttur) in a similar case. During investigated period, Sæból paid a total ISK 2.3 million (USD 16,154, EUR 14,905) in taxes.
As is customary in Iceland, interest was added to the amounts paid to the treasury in unpaid taxes.
Samherji said there was a significant disagreement about taxability in these cases, with Samherji and the Revenue and Customs Office at odds over the interpretation of provisions that formed the legal basis for the taxability. Cases related to these investigations by the District Prosecutor have now been dropped, as have cases against individuals, Samherji confirmed.
But with the Revenue and Customs Office’s examination finding that the tax issues had not been satisfactorily handled in the strictest interpretation of the law, and with a similar case determining that tax was owed by the company involved, Samherji accepted the tax liability, the company said.
Samherji said eight individuals associated with the company were “falsely accused” and this had weighed heavily in its decision. It said that if there were lawsuits, it was clear that these people would have been subjected to regulatory pressure for years to come.
“The executive management of Samherj believed it was very important to release the shackles that such a legal status entails for the individuals involved,” it said.
It further highlighted that “the onslaught of public bodies” on Samherji, companies in its group, managers, and employees for more than a decade had disturbed and interfered in its operations.
“In these cases, a detailed investigation was carried out into the operations of all the companies in the group. Samherji worked closely and with integrity with the tax authorities and provided all requested documents and data. The inspector of taxes at the Revenue and Customs Office took the initiative and suggested finalizing the cases with a settlement,” Baldvinsson said. “There has been an unusually heated discussion about the company and our people, both in the media and in the Icelandic Parliament. Therefore, it is a great relief to be able to clear away such serious accusations with the confirmation of official government organizations. The key point here is that the cases are now over without any lawsuits being brought against the company or any individual.”
Photo courtesy of Samherji
