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What You Need to Know About EU Gambling Taxes
By Shane Addinall Jul 13, 2022 IndustryGamblers who enjoy the occasional flutter in Romania may soon pay close to half their winnings in taxes. Other regions in Europe take varied stances on their citizen’s tax duties for gambling gains.A new draft Fiscal Code from the Romanian government may lead to hefty tax charges on gambling withdrawals. The country’s Ministry of Finance announced that updated tax laws include a 40% tax on casino payouts.
Trade associations in the country voiced their concerns about the hike, and the president of the Association of Remote Gambling Organisations (AOJND) believes it is a step backwards for the industry.
Gambling tax varies in other parts of Europe, resulting in excessive fees and increased black-market channelling. Gamblers in the most successful regulated regions do not have to pay any tax on gambling withdrawals, and other regions have sliding scales, much like Romania’s current tax system.
The AOJND warns Romanian lawmakers of the risks involved with unreasonable taxes, and experts predict a 50% drop in tax revenues because licensed operators will lose business.
Romania’s Massive Tax Hike
Romania’s Ministry of Finance announced drastic changes to gambling tax in its latest Fiscal Code draft. Among other important tax updates, the government seeks to collect up to 40% tax on all casino withdrawals. If it comes into effect, the new tax regime will work on a sliding scale like the current one, with increased percentages for much smaller withdrawals.
Current laws in the European nation determine a 1% tax on withdrawals smaller than RON 66,750 and withdrawals of up to RON 445,000 carrying a 16% tax and additional fee of RON 667.50. The maximum tax under current laws applies to withdrawals exceeding RON 445,000, and gamblers who withdraw more than this in one transaction must pay a 25% tax.
The draft update specifies a 10% tax on withdrawals below RON 3,000 and a 20% tax on withdrawals between RON 3,000 and RON 10,000. Withdrawals exceeding RON 10,000 will be subject to a 40% tax rate.
Odeta Nestor, AOJND president, believes the government’s tax plan will destroy the success of the country’s gambling industry. She points out that gamblers from the region seldom withdraw amounts above RON 1,000, and the average amount for withdrawals ranges between RON 200 and RON 300. Nestor warns that the proposed tax rates will dearly cost the government, the gambling industry, and consumers.
Gambling Taxes in Other Parts of Europe
Recognised as one of the best-regulated regions in the world, the UK requires no tax from gamblers in the country, as tax duties remain the burden of gambling operators in Britain. Similarly, Portuguese fiscal codes determine that prize money won by players is not taxable. In Denmark, players are exempt from taxes on any gambling withdrawals if they use licensed operators from the region.
The Swedish government approaches tax differently and rewards citizens who use licensed operators. Players who withdraw winnings from licensed providers are exempt from tax, while those who use illegal sites must pay tax.
Belgium regulates tax on games of chance on a regional level, and each of the three regions has different withdrawal rates. These rates vary according to the type of game and the region, and the maximum rate is 15% on the gross amount of wagers.
Switzerland has a unique tax structure. Winnings from land-based casinos are tax exempt, while they tax winnings from online casinos after a CHF 1 million threshold. Other forms of gambling, like lotteries and skill games, carry tax rates for withdrawals exceeding CHF 1,000, and all withdrawals from unlicensed operators are subject to tax in Switzerland.
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