The Web Travel Group Ltd (ASX: WEB) share price has sunk close to 30% after announcing a Spanish tax audit.
Web Travel Group describes itself as a global B2B (business to business) organisation that’s servicing the travel industry. Its technology connects hotels and other travel sellers to a diverse network of travel buyers all over the world through its trade-only digital travel marketplace brand called WebBeds.
Spanish Tax Agency audit
The company announced in an ASX release that the Special Delegation of the Balearic Islands of the Spanish Tax Agency has commenced an audit of the company’s Spanish subsidiary regarding direct taxes for the period of April 2021 to March 2024, as well as indirect taxes for the period January 2022 to December 2025.
Web Travel Group said that it’s co-operating with the Tax Agency. The ASX share said that it will continue to comply with its continuous disclosure obligations and will update the market on this matter as appropriate.
The company noted that the announcement was authorised for release by the Chair of the board.
What to make of this for the Web Travel Group share price
The announcement did not reveal much in terms of details, but the business has suffered a significant sell-off as a result. The market is selling now and asking questions later before more information comes to light.
Time will tell whether the Spanish authorities find something that is worth auditing for. It’s possible they might already have a reason to believe this is a worthwhile endeavour.
If I were a shareholder, I’d feel disappointed about the size of the sell-off at this point, though I wouldn’t necessarily sell.
We don’t know about the scale of the financial pain this could cause the financials and whether it’d be a one-off adjustment or an ongoing impact on its profitability.
I wouldn’t look to invest with so much uncertainty. I’d wait until there are some more details.
