Nordic stock exchange group OMX says it will comply with a ruling stipulated by The Swedish Tax Board in 2004. As a consequence, OMX will carry a VAT surcharge of around SEK 85 million as a one-off operating cost in the fourth quarter of 2007. The surcharge will have no cash flow effect, says the company. However, for 2008, OMX estimates a negative impact on operating income of approximately SEK 3 million.
The Swedish Tax Board ruled in 2004 that OMX Nordic Exchange Stockholm AB (formerly Stockholmsboersen AB) will be subject to a value added tax (VAT) surcharge for the support and operation services it purchases from other companies within the Group.
OMX intends to appeal the ruling. But recent practice from the Swedish Supreme Administrative Court and standpoints from the Swedish Tax Board in a similar case have reduced the likelihood of a successful appeal, says OMX.
After discussions with the tax authorities and an analysis of the situation, OMX will comply with the ruling. For 2007 the effect will be a one-off cost, affecting operating income, of around SEK 85 million with no cash flow effect. The cost will be recognized in the fourth quarter. For 2008, OMX estimates a negative impact on operating income of approximately SEK 3 million for the full year.