priceline.com (PCLN) Says Room Nights in EU27 May Be Understated in FY11; Booking.com to Reapply for Innovation Box Tax
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Price: $825.96 -1.96%
Revenue Growth %: +30.0%
Financial Fact:
Depreciation and amortization: 19.08M
Today's EPS Names:
CSS, STV, GIGM, More
Revenue Growth %: +30.0%
Financial Fact:
Depreciation and amortization: 19.08M
Today's EPS Names:
CSS, STV, GIGM, More
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Effective January 1, 2010, the Netherlands modified its corporate income tax law related to income generated from qualifying “innovative” activities (“Innovation Box Tax”). Earnings that qualify for the Innovation Box Tax will effectively be taxed at the rate of 5% rather than the Dutch statutory rate of 25%. Booking.com, a wholly-owned Netherlands-based subsidiary of priceline.com Incorporated (Nasdaq: PCLN), obtained a ruling from the Dutch tax authorities in February 2011 confirming that a portion of its earnings is eligible for Innovation Box Tax treatment from January 1, 2010 through December 31, 2013.
In August 2012, the Company received notice from the Dutch tax authorities that this ruling was extended through December 31, 2014. Booking.com intends to reapply for continued Innovation Box Tax treatment in future periods. See the Company's Quarterly Report on Form 10-Q for the three months ended June 30, 2012 for additional details about the Innovation Box Tax.
In February 2012, the company referenced a study published by Eurostat, the statistical office of the European Union (“EU”), that reported 1.6 billion hotel nights spent in 2011 in the 27 EU countries. At that time, the Company noted that the Priceline Group-wide room nights booked in the EU 27 in 2011 represented a “mid-single digit” percentage of that total, though the company's share may be higher or lower in given destinations. The Company calculates room nights booked based on the number of nights in a reservation regardless of the number of people staying in a room. It has come to the Company's attention that the Eurostat study calculates hotel nights spent in a different manner from the manner in which the Company calculates room nights booked and includes in its calculation the number of people staying in a room (i.e., 2 people staying in one room for one night would be 2 room nights stayed). As a result, the Company's estimate may have understated its share of room nights booked in the 27 EU countries in 2011.
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In August 2012, the Company received notice from the Dutch tax authorities that this ruling was extended through December 31, 2014. Booking.com intends to reapply for continued Innovation Box Tax treatment in future periods. See the Company's Quarterly Report on Form 10-Q for the three months ended June 30, 2012 for additional details about the Innovation Box Tax.
In February 2012, the company referenced a study published by Eurostat, the statistical office of the European Union (“EU”), that reported 1.6 billion hotel nights spent in 2011 in the 27 EU countries. At that time, the Company noted that the Priceline Group-wide room nights booked in the EU 27 in 2011 represented a “mid-single digit” percentage of that total, though the company's share may be higher or lower in given destinations. The Company calculates room nights booked based on the number of nights in a reservation regardless of the number of people staying in a room. It has come to the Company's attention that the Eurostat study calculates hotel nights spent in a different manner from the manner in which the Company calculates room nights booked and includes in its calculation the number of people staying in a room (i.e., 2 people staying in one room for one night would be 2 room nights stayed). As a result, the Company's estimate may have understated its share of room nights booked in the 27 EU countries in 2011.
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