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Tax authorities are investigating Dutch grey-market-era operators

The Dutch government has issued a letter stating that, as of last year, eight operators were under tax investigation for their actions in the Netherlands prior to the country's regulation of online gambling, and that seven additional operators will be investigated.

The memo was dated October 28, 2021, four weeks after the debut of the Dutch online gaming sector. The document was drafted by the Tax and Customs Administration's Corporate Service for Professional Technology (CD VT) and addressed to "Dutch online gaming businesses."

It was disclosed last week as a result of a request for access to government records.

Prior to the advent of regulated online gambling, the memo stated that a number of operators earned money from the Netherlands that should have been taxed but was not paid.

“It has become apparent that Dutch online gambling companies have operated ‘fiscally disguised’ since the emergence of the internet and – wrongly – have not paid any tax in the Netherlands,” it said. “A number of current files have shown that the Dutch treasury has lost tens, if not hundreds of millions in tax revenue in recent years as a result.

“This mainly concerns gambling tax, corporate tax and income tax.”

Malta and Curaçao-based operators

It was discovered that the majority of these companies were based in Malta or Curacao.

“The core of the structure is that the gambling company (on paper) is based in Malta or Curaçao and has a license there to perform the activities. Because of this, they managed to transfer tens of millions of euros from the Netherlands for years to earn without having to pay tax on it in the Netherlands,” the memo said.

Three tax inquiries had been initiated "in recent years" as a result of criminal investigations and investigations into media claims, according to the document. Here, it was stated that the total amount may exceed €200 million.

As of the memo's dissemination in October 2021, however, the tax office had "recently" identified many new cases. In these situations, the amount of money involved ranged from "few million" to €100 million.

“So far, a total of 12 ‘Dutch’ online gambling companies have come into the picture,” the memo said.

“Tax investigations are currently being conducted into 5 of these companies. The proposal is to investigate the remaining cases.”

Each probe would need between 500 and 2,000 hours of work, according to the letter.

Fine and payments

Today, the Dutch regulator de Kansspelautoriteit (KSA) fined Toto Online €400,000 (£343,793/$415,307) for targeting young individuals in the country with its advertising.

In addition, Minister for Legal Protection Franc Weerwind defended payment providers last week in response to criticism from some lawmakers regarding withdrawal delays.

Weerwind responded to questioning from Michael van Nispen of the Socialist Party and Mirjam Bikker of the Christian Union, who both expressed worry that certain licensees were paying out faster than others.

Although Weerwind agreed that certain withdrawal requests are processed more quickly than others, he stated that it is the job of the national gambling authority Kansspelautoriteit (KSA) to ensure that operators pay out in a timely manner.


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