Gabriel Resources announced that its majority-owned subsidiary, Rosia Montana Gold Corporation (RMGC), has received a tax assessment from the Agency for Fiscal Administration (ANAF), in respect of value added tax (VAT) deductions claimed by RMGC in 2011-2016 period, a press release informs.
The amount of tax assessed is RON 27 million (USD 8.6 million). This amount does not include any penalties or fines which the Canadian company may also be levied.
Gabriel Resources contests the conclusions and decision of the tax authorities and believes that the Assessment is fundamentally flawed as it is contrary to well established Romanian fiscal laws as well as European directives.
“The company believes that the VAT assessment received by RMGC from the Romanian tax authorities is illegal, retaliatory, and without merit. RMGC intends to appeal the claim and if necessary challenge the claim through the Romanian legal system; Gabriel will assist internationally as appropriate,” Jonathan Henry, Gabriel’s President and Chief Executive Officer, stated.
According to RMGC officials, the Assessment has been issued “despite its basis being contradictory to the results of 18 prior VAT audits conducted by various divisions of ANAF”.
Gabriel and RMGC are now exploring the avenues by which the Assessment can be challenged, suspended, set aside or annulled before any payment is made to ANAF. The Assessment is due for payment on August 5, 2016 although RMGC has until August 21, 2016 to make an administrative appeal to ANAF.
“RMGC has substantial and well-founded arguments on which to base such an appeal and fully intends to launch an appeal in due course. The Assessment is the latest example of an increasing number of intrusive, costly and unwarranted investigations into RMGC’s finances which have arisen since Gabriel initiated its arbitration case against Romania before the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID Arbitration”),” the quoted document also shows and continues: “Given the wide-ranging extent of the ongoing enquiries undertaken by ANAF, the breadth of documents requested and the years of operation that are subject to review, Gabriel considers that the actions of ANAF further evidence the discriminatory acts and bad faith conduct of the Romanian authorities with regard to Gabriel’s investment in Romania. Furthermore, the scope and findings of the investigations appear to be an abuse of power by the Romanian authorities in an attempt to seek a defense for the ICSID Arbitration.”
Last June, RMGC sent a letter to the Romanian Minister of Finance to protest regarding the timing and extensive scope of these investigations and requested she take steps to ensure that RMGC is treated fairly and fully in accordance with applicable international and national laws in all respects.
According to RMGC, this letter and request have been ignored by the Romanian authorities with no response to date.