Teodora Luca, Senior Associate, Mihai Cătălin Law Office
The opening of the gambling market for companies registered in the Member States of the European Union, in the Swiss Confederation or inside the Member states of the European Economic Agreement proves to be a difficult operation than originally estimated, involving not only the change in specific legislation, but of an entire system of normative acts.
One of the first problems that both the regulators in gambling but also operators have faced, since the time the first temporary rights of organization and operation of gambling were granted (at the end of June 2015) was the effective means to fulfill the pre-payment obligations attached to granting the license by a non-resident.
According to the provisions of art. II par. 7 letter g) of Law 124/2015, under which provisional duties are granted under the condition of presenting proof of payment of taxes in advance, as set out in the Government Emergency Ordinance no. 77/2009, related to provisions of art. 14 paragraph 2 of the Ordinance, granting the provisional duty was conditioned on the advance payment of license fees and permit.
The obligation to pay taxes in advance is born from the time when the documentation has been approved, the payment deadline expiring on the 25th of the month following that in which the economic operator’s request was approved.
The latter procedure approach for the provisional decision on granting the right of organization and operation of the business, as in the case of demand for licensing and authorization it is therefore represented by the evidence of payment of taxes due to the state budget. As the legislation in force at the end of June 2015 did not establish which is the fiscal authority administering non-resident taxpayer carrying out online gambling, and payment was conditional on this endeavor, the first taxes due have been paid to just one account, opened at the Sector 3 Treasury, using the tax code of the National Office for Gambling.
In early July 2015, by Order 775/2015 of the President of the National Tax Administration Agency, tax jurisdiction and enforcement of taxes owed by non-resident corporate taxpayers who do not have a permanent establishment in Romania, which organize and operate the business of gambling in Romania was granted to the fiscal administration for non-resident taxpayers inside the Bucharest General Directorate for Regional Finance.
Although apparently the issue of fiscal registration has been solved, in fact, issuing the tax registration certificate, a precondition required for payment of taxes, could not be done until after the release of the decision of the Supervisory Board of the National Office for Gambling granting temporary clearance of organization and operation of the business. Or, as I previously stated, the provisions of art. II par. 7 of Law 124/2015 … conditioned the release of it by… tax registration and payment of taxes in advance.
As such, the only way to avoid indirect elimination of non-resident operators on the market in Romania and to give efficiency to those provisions requiring payments to the State budget, was the bank transfer from the accounts of operators into the account opened at the Treasury Sector 3 on the fiscal code of National Office for Gambling.
Tax registration of non-resident taxpayer is complete only after the submission by the applicant of the decision of the Supervisory Board, even if an original copy of it was transmitted also by ONJN to the tax authority (with registration purposes of tax liability, the decision constituted a title of debt by the end of 2015, according to art. 110, paragraph 3 of the Code of Fiscal Procedure adopted by GO. 92/2003).
The power of non-resident taxpayer registration was maintained in the duty of tax administration for nonresident taxpayers in the Bucharest General Directorate of Regional and Public Finance even after the new tax legislation and procedural tax, according to the Order of the President of the National Agency for Fiscal Administration no.3775, adopted on 29 December 2015 applied starting January 1st 2016.
Unfortunately, adopting the new procedural rule tax, the tax authority has maintained not only the competence of the tax body but also the registration procedure of the organizers of online gambling, non-resident legal entities, (who do not have permanent establishment in Romania), without new legal provision to correlate with the procedure that involves licensing the organization and authorization to operate the business.
Non-resident legal entities, previously tax unregistered ( those that have not held the provisional right organization and operation of gambling at distance) found themselves in the situation of being unable to be in favor of the competent body with tax administration (territorial tax body where they are registered) of the guarantee provided by art. 29 of Government Emergency Ordinance no. 77/2009 to cover the risk of non-payment obligations to the consolidated state budget (prerequisite for approval of the application for granting authorization to operate) and, of course, not having the possibility to pay taxes due, in advance.
The vicious circle of licenses and authorizations subjected to registration tax, which in turn depended on the licensing and authorization, could not be stopped but only by amending the registration procedures by the Administration for non- resident taxpayers, following the efforts of representatives of the National Office for Gambling.
Correlating the legislation regulating the activity of gambling with those of the fiscal procedure, the Administration for non resident taxpayers understood that it was appropriate to waive the condition regarding the submission of the license and the operating permit activity (solution whose effectiveness has already been proven in practice), its transmission being carried out subsequently, on completion of the authorization procedure, with the purpose to take into account the taxpayer on fees payable.
Since the end of June 2016, the tax registration is performed based on the declaration of the operator (form 015 provided by ANAF Order 3698/2015), on the documents proving the identity of the tax commissioner (authorized representative), the registration certificate issued by the competent authority from the state of origin of operator and tax registration certificate attesting the operator to a foreign tax authority.
The deadline for issuing tax registration certificate of foreign legal entity is within 30 days from the application date.
At almost one year after the moment of issue of the first provisional duties of organizing and operating the business of online gambling and the opening of this market also for non-resident legal entities, it seems that the efforts of the Romanian state to adapt the legislative frame to the realities of this economic field are still supported, and at the end of which it is expected that the number of licensed operators to grow steadily.