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The
company said the decision involved "a transfer pricing challenge
relating to an intra-group arrangement with a UK entity", as
well as "a challenge to the timing of taxation of home
collection fee revenues."
Its shares were down 15 percent at 148.2 pence at 0813 GMT, the
worst performance on FTSE mid cap index.
IPF, which provides small personal loans to over 2.7 million
borrowers in Europe and Mexico, said it strongly disagreed with
the interpretation of the tax authority and added that both
items were accepted in previous audits by the same body.
"We will appeal the decision to the District Administrative
Court and pay the amounts assessed (about 20 million pounds
comprising tax and associated interest) which is necessary in
order to make the appeal," IPF said in a statement.
"The payment of this sum is not a reflection of our view on the
merits of the case and accordingly it will be recognized as a
non-current financial asset in our group," it added.
IPF also said it expected a similar decision from the Polish Tax
Chamber for the 2009 financial year, which would give rise to a
similar liability.
The company has been hit by a string of regulatory changes and
decisions in its markets.
In 2015, it said it was evaluating alternative business models
for Slovakia after the country amended its consumer legislation,
which was expected to hit its business there.
New credit laws in Poland, which came into effect in March 2016,
added to its woes.
In February last year, IPF Chief Executive Gerard Ryan
reiterated an earlier warning that regulatory changes in Poland
and Slovakia would hurt the company's profitability in 2016 and
beyond.
(Reporting by Rahul B in Bengaluru; Editing by Mark Potter)
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