Wednesday November 7,2012 : BETFAIR EXCHANGE TAX DISPUTE COMPELS GERMAN EXIT
Exchange model not viable under new tax laws
Unable to find resolution with German tax authorities, the Betfair Group Plc will withdraw its exchange product from the country saying "a five percent tax on sports betting stakes introduced this year make its exchange model unviable in Germany".
Betfair disputes that the new tax laws, that would make it liable for the 5 percent tax, apply to its betting exchange product, but is at odds with German tax authorities on its interpretation of the law.
German revenue amounted to 4 percent contributing approximately GBP 6 million to Betfair's core revenue during its last financial year.
Potential tax liability discussions between the Group and other relevant parties continue on what may be due since the new law came into effect in July 2012 said a Reuters report, while an Oriel Securities analyst estimates those tax liabilities may amount to GBP 20 million.