The Banca IFIS Group, considering the absence of conditions to do so, did not effect a provision for risks and charges following the facts described below:

  • The final judgment was issued by the Cassation Court on 29 September 2010 regarding the ongoing dispute with the tax authorities in relation to the former subsidiary Intesa Lariana S.r.l. The related costs were recognised on the income statement. The Bank, whose judgment is supported by the opinion of a leading fiscal and legal consultancy firm, does not believe it has other costs related to the matter;

  • On 25 July 2008 a tax check was started by the Tax Agency – Regional Department of Veneto for the tax year 2005. This check ended on 5 December 2008 with the issue of a formal notice of assessment, which revealed two findings, both connected to the correct determination of the limit for the deductibility of receivables pursuant to article, para. 3, of Presidential Decree 917/86, for a total of 1,447 thousand Euro. Moreover, considering that the mechanism places limits on the deductibility of the impairment of receivables and that the surplus (arising from the difference between the deductibility limit and the net impairment) is deductible on a straight-line basis over the next eighteen years, the application of the criterion indicated in the aforementioned formal notice of assessment would entail a tax benefit for the Bank in the years following 2005. On 21 June 2010 Banca IFIS received an adjusted tax demand regarding the two findings which indicated a greater tax amount due for 2005 of approximately 478 thousand Euro plus interest and fines.

In the aforementioned formal notice of assessment notification was also made in regard to an alleged case of tax evasion as set out in article 37-bis of Presidential Decree 600/73 regarding the write-down in 2003 of the equity investment in Immobiliare Marocco S.p.A. (a company merged into the Issuer by the act of 19 October 2009). This write-down was used to reduce profits in fifths in the following years on the basis of the losses recorded by this company pursuant to articles 61 and 66 of Presidential Decree 917/86 (in force up to 31 December 2003). On 2 February 2009 a notice was received from the Tax Agency which requested clarification on the write-down, to which the Bank promptly replied.

Again in reference to the notification of the alleged tax evasion, on 3 December 2009 the Bank received a tax demand for 2004 in which the Tax Agency adjusted income for 2004 for the purposes of corporation tax (IRES), by applying the anti-evasion provision as set out in article 37-bis of Presidential Decree 600/73 for a total of 837 thousand Euro, with more tax due for the tax year in question of approximately 276 thousand Euro plus interest and penalties. Moreover, on 21 June 2010, the bank was given an assessment notice referring to the following year in which the Inland Revenue corrected the income for the year 2005 for corporate tax (IRES) purposes, applying the anti-evasion regulations as per article 37-bis of Presidential Decree no. 600/73, for a total amount of 837 thousand Euro, with a higher level of tax due for the tax year in question of 276 thousand Euro, plus interest and sanctions. The same tax demand for tax year 2005 recorded as deferred tax assets the amount relating to the redetermination of the deductible limit for the losses on receivables as described above, for a total of 1,447 thousand Euro.

Subsequently, by the end of 2010 the Bank received a notice cancelling, under the appeal process, the tax demands issued for 2005. There is currently no further information regarding these notices, the deadlines for the assessment of which expired on 31 December 2010.

As a result of the assessment notice relating to 2004, the bank has engaged its legal and tax advisors to prepare and put forward an appeal, as per the legal terms and limits. On 22 February 2011 the appeal was discussed regarding tax year 2004 before the first level Provincial Tax Commission of Venice.

At the date of preparing this note, no sentence has been issued.

The bank, comforted by the opinion of its tax advisor, believes the Inland Revenue’s claims to be totally unfounded, in that the laws in force at the time of the relevant dispute were fully applied, also in light of recent tax legislations for parties applying the IFRS.

The bank does not, therefore, consider this contingent liability as probable.