Italian tax authority the Guarda di Finanza (GDF) has launched an investigation into PokerStars over allegations that the operator has filtered €300m in revenue through a subsidiary company in order to cut its tax liabilities in the country.
The operator has been accused of evading tax by effectively hiding revenue through its Halfords Media S.r.l. subsidiary, a business established to provide auxiliary services to its main iGaming operations in Italy.
The GDF claims that between 2009 and 2014, Halfords Media "wilfully eroded [its] tax base, decreasing the value of the services rendered to PokerStars, so as to shift the taxation of income produced in Italy to Malta and the Isle of Man."
This, the GDF says, is a technique known as "transfer pricing" where revenue is shifted to jurisdictions with lower tax rates, while costs are transferred to territories in which tax rates are higher.
"The implementation of this complex criminal design was made possible thanks to the top-position assumed in all subsidiaries by the sole administrator of the group [in Italy] - now being sued for tax evasion - whose function was to be able to determine and influence the operational autonomy in view of its exclusive personal benefit ," the GDF note added.
The investigation comes as part of a wider crackdown on suspected tax evasion, with internet giant Google allegedly having been accused of hiding an estimated €800m in taxable revenue by the GDF.
PokerStars issued a statement saying that it has been working with the Italian tax authorities since it launched an audit of the operator's Italian activities several years ago.
"We have operated in compliance with the applicable local tax regulations and have paid €120 million in local taxes over the period covered by the audit," the company's head of corporate communications Eric Hollreiser explained.
"Like many other global e-commerce companies, we vigorously dispute the stance of the tax authority regarding local establishment," he continued. "The audit is ongoing and we hope to resolve the issue in our favour soon."
In a statement Wednesday, PokerStars parent company Amaya also commented on the issue, noting that the merger agreement relating to its acquisition of the operator last year provided what it called "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," the statement read. "Amaya does not anticipate that these tax issues would apply to future fiscal periods."
Shares in Amaya Inc (Co.Data) (TSX:AYA) closed down 7.98 per cent at $29.30 per share in Toronto yesterday following the announcement.