King is facing a substantial tax bill in Sweden following an alleged transfer of rights of games like Candy Crush Saga to owner Activision.
Seeking Alpha reports that the Swedish tax agency Skatteverket is claiming $370 million (3.6 billion SEK) from the Candy Crush company after asserting that King has lost the immaterial rights to many of its games.
The challenge, determined in December of last year, comes from Activision’s acquisition of King in 2016. Skatteverket wants to collect tax on half of King’s then-value of roughly $3.4 billion, as the immaterial rights for the company’s hugely-popular games left Sweden.
“We believe that there has been a transfer of rights of the Company in Sweden,” said Skatteverket specialist for internal pricing Roberth Glansberg. “We want to tax this transaction by half of the value on the immaterial rights.”
This isn’t the first time Skatteverket has come knocking at King’s door. The agency previously claimed $55 million, believing King’s Swedish profits had been moved to Malta.
King has until February to pay this latest fine. Its lawyers have contested that Skatteverket must follow OECD guidelines regarding immaterial rights - a contest the agency has refused.
Skatteverket explained: “The guidelines constitute of no law from a Swedish perspective and can only be used as guidance.”
King has until the end of February to pay the fine. Such a figure may seem small change to the mobile studio, whose range of Candy Crush games made over $1.3 billion in 2018 alone.