Tax On Gambling Business: New Draft Law and Rate Reduction

On January 3, 2020, the Verkhovna Rada obtained the draft law No. 2713 on amendments to the Tax Code of Ukraine concerning the taxation of gambling company revenues. It is currently under consideration by committees.

Let’s examine the provisions specified in the document.

Draft law goal

An explanatory memorandum stresses that the bill is aimed at creating beneficial conditions in Ukraine for bringing the gambling industry out of the shadows and providing legal operations of gambling companies using the stimulating role of taxes.

The necessity for the amendments to the Tax Code is explained by the fact that despite Ukraine’s ban on gambling businesses, the country still has the grey gambling market. Therefore, the state loses money in terms of unpaid taxes while more and more people suffer from gambling addiction. The adoption of the law on government regulation of gambling activities will encourage market unshadowing.

General provisions of the bill

The draft law stipulates that an income tax rate for gambling companies will be 10% (the current one is 18% of the total profit). Such a tax is expected to be imposed on betting providers, land-based and online casinos, slot machine halls, and lottery organizers.

Besides, one offers to exempt winnings caused by participation in games of chance from a personal income tax and a military levy.

Advantages of new gambling taxation rules

This bill is going to make gambling business taxation more friendly, inspiring market insiders to come out of the shadow.

Experts mention that if the document is approved, a tax burden will be more favorable for operators’ income declarations.

For example, due to the absence of taxes on physical entities’ winnings, gambling organizers won’t have to act as revenue agents of their clients and pay 19.5% of the overall winning sum. At the same time, visitors of gambling venues won’t have to pay taxes on winnings resulting from gambling participation.

Gambling regulation law

On January 16, MPs adopted the draft law on gambling activity regulation in Ukraine in the first reading. This legal document includes the types of gambling businesses that are suggested to authorize, notes the nuances of licensing, holding, and organizing gambling games, as well as prescribes significant regulation aspects. Now, the bill should pass in the second reading.

You will be able to discover more about the specific nature of gambling legislative regulation in Ukraine and other countries at a major exhibition, Ukrainian Gaming Week, on April 15-16. The event will bring together Ukrainian and foreign companies providing advanced solutions for the gambling industry.

The event will feature a conference involving government officials and foreign experts. They will talk about the international experience in gambling business operations as well as discuss the particularities and prospects of the Ukrainian market.

Event program and details ►►►