Paddy Power Betfair to challenge €55m European tax bill
Operator hit with tax demand by German and Greek authorities
Paddy Power Betfair (PPB) today said it will challenge two separate court rulings which ordered the operator to pay a total of €55m in taxes.
The Hesse Fiscal Court ordered the bookmaker to pay €40m (£35.1m) in back taxes relating to revenues generated by its Betfair exchange business, which operated in Germany until November 2012.
This amount relates to a five-month period between July and November 2012, when the Betfair exchange was in operation. At the time the operator received legal advice that its Betfair exchange would not be subject to a forthcoming 5% turnover tax on sports betting operations, but later withdrew the brand from the German market in November citing concerns about this issue. In a statement PaddyPower Betfair said “Discussions are continuing with tax authorities regarding the potential tax liability, if any, arising from bets placed on its exchange since the law came into effect”.
PPB was also hit with a second tax demand by Greek authorities over its interim licence to operate the paddypower.com website for the Greek market.
Greek authorities concluded the operator is liable to pay €15m (£13.1m) in taxes, including penalties and interest, for activity during tax years 2012-2014.
PPB said it had received legal advice concerning the basis of these assessments and was “confident” in its grounds to appeal.
Pending the outcome of the appeals Paddy Power Betfair revealed it had paid its total Greek tax bill in January and was awaiting “clarity with respect to the timing of any cash payment in Germany” before making any financial adjustments for these liabilities. PPB’s full year results for 2018, are due to be published on 6 March.
Shares in Paddy Power Betfair were down by 1.17% in early trading on the London Stock Exchange following the news.
Fellow operator GVC Holdings has a pending appeal with Greek authorities following a €186.77m tax bill levied in January 2018 over the groups Sportingbet business, which was acquired in 2013.
Seeking to pay its liabilities while the appeal goes though the Greek courts, GVC Holdings entered into an agreement to pay Greek authorities €7.8m a month over the next two years.