Followers | 231 |
Posts | 14697 |
Boards Moderated | 1 |
Alias Born | 03/29/2014 |
![](https://investorshub.advfn.com/uicon/467032.png?cb=1478627184)
Thursday, August 13, 2020 5:27:23 PM
I mean, how unbelievably nuts is it that the German Tax Authorities now wants to tax Northwest for a 10% profit margin on operating expenses and clinical trial costs that the GTA thinks their subsidiary (NWBio GmbH) should have charged, BUT THAT THEY DID NOT!
On top of that, Germany has decided that ALL of the money given to the NW subsidiary for operating expenses and clinical trial costs were distributed back to the parent company NW as dividends — YET THEY WERE NOT GIVEN BACK — and therefore, these made up dividends that NEVER existed SHOULD ALSO BE TAXED. Oh, and NWBO should ALSO be charged penalties and interest for those taxes on dividends that were basically made up by the German tax authorities.
From the Q:
German Tax Matter
The German tax authorities have audited our wholly owned subsidiary, NW Bio GmbH, for 2013-2015. During those years, NWBio, Inc. sent funds to NWBio GmbH to pay for operating expenses and costs associated with the Phase III clinical trial. The German tax authorities have asserted that the subsidiary should have charged NWBio parent company a 10% profit margin on top of these costs, that they will deem that such a profit margin was charged by the subsidiary (even though it was not) and that they will tax this deemed profit margin -- even though neither NW Bio, Inc. nor NW Bio GmbH made any profit during the period in question (or at any other time), and even though the funds provided by NW Bio, Inc. were used by NW Bio GmbH entirely for operating expenses and clinical trial costs.
In addition, the German tax authorities are seeking to deem that all of the funds provided by NW Bio Inc. to NW Bio GmbH during 2013-2015 for operating expenses and clinical trial costs were distributed back to NW Bio Inc. as a “dividend” by NW Bio GmbH – even though all of the funds were, in fact, used for operating expenses and clinical trial costs in Germany, and no funds were ever distributed back to NW Bio Inc. as a “dividend” from NW Bio GmbH.
Based upon the supposed deemed “dividend” of the entire funds provided by NW Bio Inc. to NW Bio GmbH during 2013-2015, the German tax authorities are seeking to impose withholding tax on this entire amount, plus penalties and interest for the deemed withholding tax being overdue. Under the US-German Tax Treaty, if we were to pay this withholding tax, we are supposed to then receive a refund of this tax (though not the interest and penalties).
The deemed “profit margin” never existed, and the deemed “dividend” also never existed -- both of these assessments are contrary to the facts. Although it is late in the administrative process, we have mobilized additional tax and accounting experts both in Germany and in the US to assist us in objecting to these deemed assessments and taxes and in seeking to have them withdrawn or overruled. We plan to fight these assessments through the administrative procedures with the German tax authorities and, if necessary, the German tax court. However, in parallel, we are also pursuing settlement with the German tax authorities for an immaterial sum. In July, the Company received a subpoena from the SEC requesting more information. We are cooperating with this query.
It is too early at this point to determine what tax amounts may ultimately be owed. It is currently anticipated that there will be no further interactions with the German tax authorities until sometime in September, and that the administrative process may take considerable time after that. There can be no assurance that the German tax authorities will agree with our position, even if they appear to be open to discussions and to approaches under the German-US tax treaty and OECD Transfer Pricing that would result in our calculations that there is no tax liability. Given the parallel tracks we are employing, the Company is not currently able to reasonably estimate the amount that NW Bio GmbH may ultimately have to pay for this matter. However, after considering further proceedings (including application of the US-German tax treaty), under its evaluation under ASC 740, it is the view of the Company currently that it is not more likely than not that the resolution of these tax matters will ultimately result in a net material charge.
https://www.sec.gov/ix?doc=/Archives/edgar/data/1072379/000110465920092797/nwbo-20200630x10q.htm
We can also see in the Q that NWBO spent $375k on legal fees in the first Q, and then $613k in the second Q ($238k more), and my guess would be that a large part of that was spent chasing down this insane German tax issue. It's unfortunate that so much money has had to be spent on legal expenses chasing down these inane legal battles.
My guess is that when the story of the FDA screening halt finally comes out, what happened will be along a similar vein that will make those of us who have hair want to pull it out of our heads.
Recent NWBO News
- Biophma Announces Exclusive In License for Dendritic Cell Technology, Sending Shares Higher • AllPennyStocks.com • 06/17/2024 04:40:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/04/2024 09:11:16 PM
- Form DEF 14A - Other definitive proxy statements • Edgar (US Regulatory) • 06/03/2024 09:22:55 PM
- Form PRE 14A - Other preliminary proxy statements • Edgar (US Regulatory) • 05/22/2024 08:13:36 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/10/2024 09:04:57 PM
- Form NT 10-K - Notification of inability to timely file Form 10-K 405, 10-K, 10-KSB 405, 10-KSB, 10-KT, or 10-KT405 • Edgar (US Regulatory) • 03/01/2024 10:04:38 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 12/02/2023 01:31:35 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/16/2023 10:11:54 PM
- Epazz, Inc. (OTC Pink: EPAZ) ZenaDrone Demonstration to Defense Departments of UAE and Saudi Arabia • InvestorsHub NewsWire • 11/15/2023 12:19:31 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 11/09/2023 09:30:39 PM
- Epazz, Inc. (OTC Pink: EPAZ) US Navy Collaboration ZenaDrone 1000 • InvestorsHub NewsWire • 11/09/2023 01:00:34 PM
- Epazz, Inc. (OTC Pink: EPAZ) US Navy Collaboration ZenaDrone 1000 Extreme Weather Demo • InvestorsHub NewsWire • 11/07/2023 12:29:43 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/09/2023 08:36:14 PM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM
VAYK Exited Caribbean Investments for $320,000 Profit • VAYK • Jun 27, 2024 9:00 AM
North Bay Resources Announces Successful Flotation Cell Test at Bishop Gold Mill, Inyo County, California • NBRI • Jun 27, 2024 9:00 AM
Branded Legacy, Inc. and Hemp Emu Announce Strategic Partnership to Enhance CBD Product Manufacturing • BLEG • Jun 27, 2024 8:30 AM
POET Wins "Best Optical AI Solution" in 2024 AI Breakthrough Awards Program • POET • Jun 26, 2024 10:09 AM