Another Swedish esports organization comes under the radar of Swedish Tax authority for Tax evasion through 2016-2017.
The esports organization Fnatic has been fined for over one million SEK (approximately 100k USD) by the Swedish Tax Agency for not paying payroll taxes for the years 2016 and 2017.
Fnatic is the 2nd Swedish organization whose name came up in Tax Fraud case. Earlier this year, similar charges were alleged against NiP gaming by their former employee for not paying the promised taxes on behalf of their players.
The Swedish Tax Agency started its initial investigation after the players of the organization stated the payroll fees were being paid by Fnatic in their tax declaration. Further, the agency also found that the players were covered by Swedish social insurance and weren’t paying “F-skatt” (F-tax), but Fnatic had never approved players for the same. This led to a confusion between the organization and players which resulted in discrepancies in tax declaration and taxes not being paid (or partially paid) for over 2 years.
Later, the Tax Agency filed a case against Fnatic in the Administrative Court. At the time of the hearing, the organization claimed that it was it’s player’s responsibility to pay the right taxes and organization isn’t responsible for the proposed taxes. Although the court determined that the organization was indeed responsible for paying employer contributions and tax surcharges.
In the ruling, the Judge ordered the organization to upwards of one million SEK in fines and also to reimburse the cost for Tax Agency.
Currently, Fnatic have two months to appeal the court’s decision but at this time it is unclear whether they will agree on the charges or appeal the court’s decision.