German tax authorities chase Malta-based sportsbooks

A number of Malta sportsbooks are being pursued by German authorities regarding potential unpaid taxes derived from bets struck with players based within German borders, eGaming Review understands.

The unnamed firms, which the German tax office believes may be accepting customers from Germany, have received letters asking to clarify their tax arrangements in the country.

The pursuit of unpaid taxes is unrelated to the country’s current regulatory situation – even those firms who failed to make the provisional list of sports betting licensees remain subject to Germany’s 5% tax on stakes.

And according to gaming lawyer and president of the International Masters of Gaming Law, Joerg Hofmann, directors found guilty evading the levy could face criminal liability if due taxes remain undeclared.

“This is a criminal offence,” Hofmann said. “There is criminal liability for directors which can be enforced across the European Union and in jurisdictions which cooperate with Germany.”

Hofmann added that once a firm is on the radar of German tax authorities there is little chance of avoiding criminal proceedings if taxes remain undeclared.

“We want to advise our clients to consider if they need to make a decision,” Hoffman said. “Time is running and once authorities know you owe taxes to the government it is too late for a voluntary self-declaration of tax offences. You need to contact the authorities before they contact you,” he stressed.

At this stage it is unclear why operators in Malta have been specifically targeted other than it being a centre for egaming operators, and it is possible that authorities will target other jurisdictions in future.

“They have to be aware that we are not talking about regulatory issues which due to the legal uncertainty provide more opportunities to be challenged. If you offer bets to a German customer, with or without a license, the taxation duty applies in the same way,” Hofmann said.