XML 56 R15.htm IDEA: XBRL DOCUMENT v3.3.0.814
Commitments And Contingencies
9 Months Ended
Sep. 30, 2015
Commitments And Contingencies [Abstract]  
Commitments And Contingencies

8.COMMITMENTS AND CONTINGENCIES

 

Litigation

Casinos Poland

In March 2011, the Polish Internal Revenue Service (“Polish IRS”) began conducting a series of tax audits of CPL to review the calculation and payment of personal income tax by CPL employees. Based on the March 2011 audit, the Polish IRS concluded that CPL should calculate, collect and remit to the Polish IRS personal income tax on tips received by CPL employees from casino customers for the periods from December 1, 2007 to December 31, 2008, January 1, 2009 to December 31, 2009 and January 1, 2011 to January 31, 2011. The Company has recorded a contingent liability on its condensed consolidated balance sheet and the balance for all open periods as of September 30, 2015 is estimated at PLN 12.0 million ($3.2 million based on the exchange rate in effect on September 30, 2015).

 

After the proceedings with the Polish IRS, the Director of the Tax Chamber in Warsaw upheld the decision of the Polish IRS in November 2012 for review of the period from January 1, 2011 to January 31, 2011. CPL paid PLN 0.1 (less than $0.1 million) to the Polish IRS for taxes and interest owed resulting from the decision. CPL appealed the decision to the Regional Administrative Court in Warsaw in December 2012. In September 2013, the Regional Administrative Court in Warsaw denied CPL’s appeal. CPL appealed the decision to the Supreme Administrative Court and expects a decision in the first quarter of 2016.

 

After further proceedings and appeals between CPL and the Polish IRS, the Director of the Tax Chamber in Warsaw also upheld the decision of the Polish IRS in December 2013 for review of the period from December 2007 to December 2008. CPL paid PLN 3.5 million ($1.2 million) to the Polish IRS for taxes and interest owed resulting from the decision. CPL appealed the decision to the Voivodship Administrative Court. In January 2014, the Voivodship Administrative Court denied CPL’s appeal. CPL appealed the decision to the Supreme Administrative Court on December 19, 2014 and expects a decision in the first quarter of 2016.

 

After further proceedings and appeals with the Polish IRS, the Director of the Tax Chamber in Warsaw also upheld the decision of the Polish IRS in December 2014 for review of the period from January 2009 to December 2009. CPL paid PLN 2.8 million ($0.9 million) for taxes and interest owed resulting from the decision. CPL appealed the decision to the Voivodship Administrative Court in January 2015 and received an oral decision in October 2015. The court found in favor of CPL on the procedural grounds that the prior tax proceedings were not conducted by the appropriate tax authority. However, the court also found that CPL’s tax records for 2009 remain open for audit by a different tax authority. CPL expects to receive the written decision from the court within the next several months. Following receipt of the written decision, both CPL and the Director of the Tax Chamber in Warsaw have 30 days to appeal the decision to the Supreme Administrative Court.