U.K. Online Gambling Tax Change Now Before CJEU

Published Tuesday, July 14, 2015 - Online-Casinos.com
U.K. Online Gambling Tax Change Now Before CJEU

The United Kingdom decided in December of 2014 that it would change its tax system for online casinos and card rooms operating in the jurisdiction. That point of consumption tax and the required licensing of operations offering gambling services in the U.K. prompted an outcry from online gambling concerns in Gibraltar. Those enterprises subsequently brought the issue to the courts which determined that the new rules may have contravened European Union laws and should be decided by the Court of Justice of the European Union.
With the new regime online operators from outside of the UK based in approved ‘white listed’ jurisdictions such as Gibraltar, the Isle of Mann or Antigua and Barbuda, have not been subject to tax in Britain, their liabilities instead being in the tax regimes of the jurisdictions from which they operate. Under the provisions of the 2014 Gambling (Licensing & Advertising Bill) online casino operators will now be required to pay 15% tax on their gross profits from bets placed in the UK, no matter where the operator is located.

A license from the UK Gambling Commission is also required and it will be an offence for unlicensed operators to offer online gambling services to UK residents or to advertise in the jurisdiction.

The Gibraltar Betting and Gaming Association hired law firm Olswang to issue judicial review proceedings last October, asking the High Court to judge on the lawfulness of the tax regime within the Finance Act in the U.K.  
The GBGA unsuccessfully appealed against a new licensing law in October. High Court judge Lord Justice Green ruled that the licensing law was not unlawful under EU or domestic law. The GBGA was later granted a judicial review into the tax regime which resulted in Justice Charles ruling that the tax raises issues in European law and a formal reference of the case will now be made by the High Court to CJEU.



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