Licensing and authorization taxes for online gaming activity

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By Teodora LUCA – CA Mihai Luca

Gaming is that commercial activity by which material gains are attributed, generally pecuniary gains, as a result of a public offer of a potential gain made by the organizer and the acceptance of such an offer by a participant, by perceiving a direct or dissimulated participation tax, the gains being attributed by a random selection of the results of the events making the object of the game, regardless of the way this takes place.
Remote gaming (on-line) are those activities characterized by the fact that they take place other than in the physical presence of the participants, being organized and transmitted by a remote communication system, generally, by internet.
According to the dispositions of art. 12 OUG 77/2009 regarding the organization and exploitation of gaming, the organization license and the exploitation authorization are awarded to the economic operator meeting the conditions provided by the law for the organization of these activities.
The license for the organization of the activity is valid for 10 years from its awarding date, and the exploitation authorizations is renewable annually, their validity being conditioned by the fulfillment of their obligation related to the tax payment.
The non-fulfillment of the payment obligations to the general consolidated budget or a delay in their payment greater than 30 days from the due date of such obligations, entitles the Supervisory Committee of ONJN to dispose the revocation of the license or of the authorization.
The annual tax afferent to the re mote gaming organization license is calculated function to the turnover recorded by the company the previous fiscal year, respectively:
If the organizer’s turnover is lower than 500.000 Euro/year, the licensing tax will amount to 6.000 Euro;
If the organizer’s turnover is between 500.001 Euro and 1.000.000 Euro/year, the licensing tax will amount to 24.000 Euro;
If the organizer’s turnover is between 1.000.001 and 5.000.000 Euro/ year, the licensing tax will amount to 60.000 Euro;
If the organizer’s turnover is between 5.000.001 and 10.000.000 Euro/ year, the licensing tax will amount to 96.000 Euro;
If the organizer’s turnover is higher than 10.000.000 Euro/ year, the licensing tax will amount to 120.000 Euro.
A first observation that needs to be made is that, in determining the organizer’s turnover, there will not be taken into consideration only the income from gaming activities or only the activity performed on Romanian territory, but, instead, all the company’s incomes will be cumulated, regardless of the activity or the jurisdiction they had been obtained in.
The license tax is to be paid in advance, until the 25Th of the following month after the organizer’s application was approved by the Supervisory Committee, for the first year, respectively, 10 days before the date representing the anniversary date of the licensing year, for the following years.
The value of the license tax is to be updated annually, based on the documents certifying the value of the company’s turnover in the previous fiscal year.
The authorization tax represents 16% from the income obtained by the organizer from gaming activities, as defined by art. 11 from the emergency ordinance, but no less than 100.000 Euro annually.
According to the definition from art. 11 from OUG 77/2009, for the calculation of the tax afferent to the exploitation authorization for a licensed gaming operator, is calculated as the difference between the sums received from the gamers as participation tax and the prizes awarded (including «jack-pot») for each type of game, in one day/calendar month, according to point 1 sub-point. II from the Annex to the hereby emergency ordinance.
In the case o gaming activities where the organizer receives a commission from the participants/winners of the games, for the calculation of the tax afferent to the gaming exploitation authorization, the income obtained by a licensed organizer from gaming activities is represented by the collections obtained (commissions withheld from the participants to the game), respectively the share from the sum perceived by the organizer, according to the gaming regulations, in one day/ calendar month, according to point 1 sub-point. II from the Annex to the hereby emergency ordinance.
The gains from gaming activities are, according to art. 8 par. 1 from OUG 77/2009, the sums in cash, goods or services awarded by the organizer to the participant to the game declared a winner, in accordance with the provisions contained in the regulation of that game. The liability regarding the awarding of the gain or of the prize lies exclusively with the gaming organizer.

(to be continued in the next edition)