GVC Holdings has disclosed to shareholders that it put €200 aside in case it is forced to pay a massive €186.77 to Greece in back taxes for the operations of its subsidiary SportingBet in the country in 2010 and 2011.
The news caused GVC stock to fall on the London Stock Exchange as it finalizes its $4 billion merger with Ladbrokes.
GVC said it received a tax audit assessment from the Greek Audit Center for Large Enterprises for €186.77 million for SportingBet’s activity in the Greek market for the years 2010 and 2011. GVC acquired Sportingbet in 2013 from bookmaker William Hill.
GVC said in the filing that the amount is “substantially higher by multiples of the total Greek revenue generated by the subsidiary.”
“The board strongly disputes the basis of the assessment calculation, believing the assessed quantum to be widely exaggerated and is confident in the grounds of appeal,” the filing said.
GVC’s legal and tax professionals have advised the company to challenge the amount in Greek courts, the company said.
According to a report at CalvinAyre.com, GVC will pay a monthly sum of approximately €7.8m for the next 24 months to be held on account, which will require GVC to make a €200m provision on its 2017 financial accounts.
GVC said the set aside is not an admission that the tax bill has merit.
An unnamed source at the company quoted by London Financial Times said GVC leadership s feels the bill is a “spurious and desperate” claim as Greece struggles with a severe debt crisis.
