Paddy Power called to account for back taxes in Germany and Greece
It’s tax season in many parts of the world and Paddy Power Betfair is sharing the pain that’s being felt by many of its players as it faces some very large tax bills in both Germany and Greece. The company is currently on the hook for more than €55 million ($62 million USD) in back taxes in both these important marketplaces.
Paddy Power’s tax troubles in Germany date back to 2012 and relate to tax bills rung up by Betfair Exchange. Betfair Exchange, of course, no longer exists and was merged with Paddy Power nearly three years ago. Furthermore, Betfair Exchange stopped operating in Germany in 2012. Company officials have stated that they don’t think the company is actually responsible for the $46.2 million bill, which was issued by the Hessen Fiscal Court and was based on the company’s revenue in 2012, but are going to pay it anyways. (This reluctant acceptance of such a massive, and possibly incorrect, bill suggests that fighting it could be more expensive in the long – especially if it hobbles the company’s efforts to work with German players.)
In Greece, the company was hit with a Greek tax assessment for financial years 2012, 2013 and 2014 totaling €15 million ($16.9 million USD). This bill was related to an interim license PaddyPower.com held at the time. The company also disputes this figure and points out that it’s more than the revenue the company generated during that period and is fighting the Greeks on the matter.
In a press release, company officials addressed the tax issues saying, “The Group strongly disputes the basis of these assessments, and in line with the legal and tax advice we have received, is confident in our grounds to appeal. We therefore intend to do so. Pending the outcome of these appeals, we paid the total Greek liability in January 2019 while we await clarity with respect to the timing of any cash payment in Germany.”
The tax issue has not, however, soured investors on the company – which is cutting deals at a brisk pace in the United States. Share for Paddy Power were 1.5 percent yesterday.
Tags: Paddy Power