Canadian gambling giant Amaya Inc. announced today that it has paid a final settlement of €5.9 million to the Italian tax authorities in order to settle a tax dispute that was disclosed back in 2015.
Last year, Italian tax regulators estimated that an Amaya subsidiary related to PokerStars’ operations in Italy owed an approximate of €85 million for the period between the 2009-2014 tax years. Under this latest agreement, which represents a final settlement in the dispute, the gambling company has paid all owed amounts to Italian authorities for the above-mentioned period.
What is more, as part of the agreement, Amaya’s Italian subsidiary would not be required to pay any additional taxes for 2014. Both the settlement amount and all related expenses have been paid from an escrow fund that was established upon Amaya’s acquisition of the PokerStars brand back in August 2014.
In March 2015, the Italian financial police accused PokerStars of failing to declare the amount of €300 million in taxable revenue. Authorities also argued that the online poker brand had used somewhat illegal practices in a bid to avoid higher tax charges on the generated income, with the so-called “transfer pricing” being among those.
In other words, PokerStars had allegedly manipulated costs and the price of its services to reduce tax charges in the country. Italian tax authorities also pointed out that the gambling company had transferred income generated within Italy’s borders to other subsidiaries of the Rational Group, PokerStars’ former owner, located in jurisdictions with more tax-friendly regulations such as Malta and the Isle of Man.
Italy’s tax police further commented last year that the online poker brand and the Managing Director of its Italian operations would be charged for implementing the afore-mentioned complex “criminal design.” It even become clear last year that other gambling companies that provided their services in Italy might be investigated for engaging in similar practices.
Back then, the world’s biggest online poker room denied all accusations, saying that it had worked closely with Italian tax authorities since the latter announced an audit. PokerStars also said that it had paid the approximate amount of €120 million in tax revenue over the audit period.
