Updated 5.20pm with company statement
The German tax authorities have roped in their Maltese counterparts to chase €10 million in value added tax owed to them by Lottoland Limited, a gaming company based in Malta.
Berlin used a 2010 EU directive concerning mutual assistance for the recovery of claims relating to taxes and duties in different member states. On the basis of this directive, the Maltese tax commissioner filed proceedings in the First Hall of the Civil Court to recoup the monies.
Lottoland was established in May 2013 in Gibraltar. It is privately owned and was registered in Malta in 2019 and headquartered at the St Julian’s Business Centre. Its online presence is operated by EU Lotto Ltd, a company registered in Gibraltar as well as Deutsche Lotto and Sportwetten Limited, both companies registered in Germany.
Before Mr Justice Grazio Mercieca, the Maltese tax authorities explained that they were filing the suit on behalf of their German counterparts over a €9.8 million tax bill owed by Lottoland Limited which was based in Malta.
The company claimed in court that the tax bill was not theirs but the court ruled that the documentation presented in court by the German and Maltese tax authorities left no doubt that the company owed the outstanding amount of tax to the German tax authorities.
Mr Justice Mercieca ruled that Lottoland Limited is a Maltese company with a presence and address in Malta and therefore the applicant had the right to collect the total amount of tax on behalf of the competent authority of another EU member state.
He said that according to the EU directive, such a request for a member state is dealt with as if this were a request for a civil debt due to the Maltese government and gives a competent authority in Malta the power to collect it.
Legal sources said this provision in the law and the EU directive was rarely used in Malta.
Lottoland claims to be the world’s largest online lotto betting company. Since its inception, the company has paid over €1 billion in prizes to winners and is the Guinness World Record holder for the largest online gambling payout in history.
Company to appeal judgement
Company CEO Nigel Birrell told Times of Malta that Lottoland would be appealing the judgement.
"The proceedings have been instigated by the Berlin-Neukölln tax office against the wrong company in the incorrect jurisdiction, relating to a VAT assessment which has no merits," Birrell said.
"Furthermore, Lottoland Limited Malta was not incorporated until 24 January 2019, which was subsequent to the period to which the VAT assessments in dispute relates, being from July to December 2018," he added.