Value Added Tax – British American Tobacco vs. Yesmoke

On Wednesday, October 14th, Yesmoke received notification of the hearing, scheduled for the morning of Friday the 16th in Rome.

Guardia di Finanza The public clarification requested from British America Tobacco in answer to its letter “reserved and confidential”, had arrived, but in the form of a recourse, with the request for the preventive removal of the news article published on October 1st: “BAT, 500 Million of Evaded VAT Discovered by Yesmoke”.

According to BAT, this text is “totally misleading as it attributes absolutely unfounded facts to British American Tobacco Italia".

But what was the sense of a petition to the court? The sentence was already there: it was the opinion of the Revenue Agency - Agenzia delle Entrate, interpellated by Yesmoke.

BAT claimed that the non-payment of VAT by Logista Italia follows, in this case, correct procedures. But this is the exact opposite from what the Revenue Agency affirms.

BAT’s recourse, apparently written by someone who has little preparation in the fiscal field, is full of meaningless absurdities based on the claim that a private company can automatically take on and benefit from privileges reserved for the State Monopoly.

BAT, in fact, purchased the Italian Tobacco companies - Ente Tabacchi Italiani (ETI)  - after Italy’s privatization of the cigarette-manufacturing sector, and today it is the owner of the principal Italian brands, while the Spanish company Logista is the proprietor of all the tobacco distribution in Italy.

Yesmoke complied with the requests of the counterpart changing the title of the article into "Sigarette, 500 milioni di IVA omessa scoperti dalla Yesmoke" (Cigarettes, 500 million of omitted VAT, discovered by Yesmoke), and eliminating  every explicit reference to BAT.

Premised that VAT “evaded” and VAT “omitted” are the same, we point out that if someone is unable to interpret regulations that require the payment of taxes, this should not be Yesmoke’s problem.

Why did BAT make this move?

We were expecting the AAMS or Logista to make themselves heard, as they and not BAT, were clearly named in the article as responsible for the VAT omitted on cigarettes manufactured in Italy. Though BAT in past years was the largest manufacturer of cigarettes in Italy (Philip Morris and Japan Tobacco have all their production abroad), the company was not responsible for what happened.

In fact, the incriminated article begins with these words:

“The Amministrazione Autonoma dei Monopoli di Stato - AAMS (Autonomous Administration  of the State Monopolies) has not correctly regulated the privatization of the sector of processed tobacco distribution. This shortcoming has led to violation of the most elementary fiscal rules …. According to Yesmoke’s findings, Logista’s ignorance in indicating, to its suppliers of processed tobaccos produced in Italy, the rules to follow in the preparation of their fiscal documents, probably resulted in the greatest VAT evasion ever occurred in Italy”.

Get to the bottom

The article, when it says that “all of the suppliers of processed tobaccos produced in Italy have not subjected to VAT the transfer of their products to Logista” is accusing all the cigarette manufacturers on the Italian territory (including Yesmoke, that has since put things in order).

We hoped that, after Yesmoke removed every explicit reference to BAT in the title of the article, that the counterpart, noting all the unanswered questions pointed out in the petition, would make its contribution to clarify the matter - not with the intention of removing the news from the net, but making an effort to establish who is talking rubbish: British American Tobacco or Yesmoke.

Can one company follow one fiscal procedure, and another company do something completely different? …This is a real dilemma, which needs to be solved as soon as possible!

Yesmoke’s Blog, is the only source of information on this affair of evaded (or omitted) VAT, and it fills a disquieting gap - and Yesmoke is watching closely for possible rip-offs.

Needless to say, Yesmoke’s Blog is open to all,  and we invite BAT to publish on it any comments, articles and documents it wants.

Documents

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