Turkey’s Tüpraş faces $69 mln hit from tax demand, fines

Turkey’s Tüpraş faces $69 mln hit from tax demand, fines

ISTANBUL - Reuters
Turkey’s Tüpraş faces $69 mln hit from tax demand, fines

DHA Photo

Turkey’s sole oil refiner Tüpraş has said it faces a tax demand and related fines totaling 160 million liras ($69 million) following an 18-month investigation by authorities.

The demand for 65.6 million liras and fines of 94.4 million liras date from 2009 to 2013, the company said in a filing with the stock exchange.

“We plan to utilize all of our legal rights including negotiations,” Tüpraş, owned by Turkey’s biggest group Koç Holding, added in the statement late on Jan. 8.

A Tüpraş official declined to comment further.

In the past, tax fines levied on companies have been reduced sharply after negotiations. Shares in Tüpraş, which is based in Kocaeli province, dipped 0.88 percent to 56.05 liras on Jan. 9 morning, while the broader index was slightly higher.

The tax investigation began in July 2013, when police and finance ministry inspectors raided the offices of Tüpraş and Aygaz, Turkey’s biggest seller of liquefied petroleum gas, also owned by Koç - and checked their physical inventories.

The family owns five of Turkey’s 10 largest companies, and then Prime Minister Recep Tayyip Erdoğan expressed anger with the Koç-run Divan Hotel for opening its doors to protesters fleeing police tear gas. The hotel said at the time that it acted humanely and the accusations of backing the protests were unfair.

Erdoğan - elected president in 2014 - last month attended a ceremony for a $3 billion upgrade of the Tüpraş refinery, one of Turkey’s largest-ever industrial investments, leading to speculation the two sides had made amends.

Tüpraş has faced official penalties in the past. In 2014, the competition board fined it 412 million lira for abusing its dominant market position in pricing and contracts. It was also ordered to pay 605 million liras in back taxes and fines in 2010 but negotiated it down to 153 million liras.