Swedish provider of solutions for the international online casino industry NetEnt AB (publ) announced that a ruling from Sweden’s Administrative Court of Appeal has been issued regarding the company’s dispute with the country’s Tax Agency.
NetEnt’s previously filed appeal has been approved by the Administrative Court of Appeal and an earlier ruling by the Administrative Court has been reversed. Under the latest ruling, the online casino supplier would receive a SEK1.8-million compensation to cover the legal costs related to the ongoing process. The company revealed that apart from that, neither its earnings, nor financial position would be impacted in any way.
NetEnt’s dispute with the country’s tax authority dates back to January 2013, when the supplier announced that the Swedish Tax Agency had imposed additional taxes of about SEK94.4 million for the period between 2007 and 2010 after a tax audit had been conducted. Over the course of the legal dispute, the company has reported the aforementioned sum as a contingent liability.
The agency explained its decision with an improper and insufficient motivation of the transfer pricing between Net Entertainment NE AB, which is known to be based in Sweden, and its Malta-located subsidiary.
Following that, Sweden’s tax authority offered an alternative interpretation to NetEnt’s advisers on various agreements inked between several companies within the Swedish gaming group.
Over the course of the three-year-long dispute, NetEnt has maintained its position that it had followed the applicable taxation laws for its operations. Thus, no provisions related to the dispute had been made. Given this, the supplier’s reported earnings and financial positions will not face any impact, excluding the legal costs compensation it is to receive, following the Administrative Court of Appeal.
NetEnt said in a statement from earlier today that the issued ruling reflected the view the company and the experts it had hired to consult it have maintained throughout the whole process. The latest ruling overturned a court decision issued by the Swedish Administrative Court, under which the gaming supplier would have had to pay the above-mentioned amount. That particular ruling followed a review of NetEnt’s operations conducted by the country’s Tax Agency.
