PokerStars faces €300 million Italian tax fraud accusation

taxPokerStars (Amaya Gaming) Italian operations have been accused by the Guardia di Finanza (financial police), of “wilfully eroding” Italian generated income revenues to offshore jurisdictions such as the Isle of Man and Malta.

Italy’s financial police have begun an investigation against PokerStars’ Italian business branch Halfords Media Italy, accusing the company of not declaring on more than €300 million on taxable revenues.

The authorities’ further claim that PokerStars were using illegal evasion practices such as “transfer pricing”, which involves the manipulating of the price of service and costs in order to decrease taxes charges on income generated.

PokerStars management has strenuously denied any wrongdoing, quickly releasing the below corporate statement to the media

“PokerStars has been working with Italian tax authorities since they launched an audit several years ago. We have operated in compliance with the applicable local tax regulations and have paid €120m in local taxes over the period covered by the audit.

“Like many other global ecommerce companies, we vigorously dispute the stance of the tax authority regarding local establishment.

“The audit is ongoing and we hope to resolve the issue in our favour soon. Our operations continue as usual on we remain focused on delivering the most popular online poker service in Italy,

Amaya Gaming owners of PokerStars issues a statement this morning, claiming that it had been aware of the ongoing tax dispute

“The tax dispute relates to operations of PokerStars dating from before the acquisition of the company by Amaya in August, 2014. The merger agreement related to that transaction provides remedies to address certain income tax and other liabilities that might occur post-closing but stemming from operations prior to the date of acquisition, including monies held in escrow as initial sources for indemnification. The current tax dispute is something “

“Amaya was aware of prior to the transaction. Amaya does not anticipate that these tax issues would apply to future fiscal periods. The company’s operations continue as usual on and it remains focused on delivering the most popular online poker service in the Italian market.”

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