The Gambling practice in 2021
Why should gambling be exempted from the obligation to use electronic fiscal cash registers?
Article from the series “Gambling practice“, by Anchidim Zăgrean, President of ROMBET
Due to the regulations in force, at this date, economic operators in the field of gambling are totally confused as to the obligation to use electronic fiscal cash registers, due to the fact that they are unable to comply with this obligation. or they are forced to force inappropriate and unrealistic compliance. This serious situation, in the activity of gambling, arose due to the lack of correlations of these provisions, with general content, to the special regulation of the organization and operation of gambling but also due to the lack of interest of the authorities to agree these provisions. with the practical operations specific to this activity.
In order not to put gambling organizers in this delicate situation of purely administrative compliance and the need to try to apply these provisions only out of a desire not to break the law, we must say that the legislator has overlooked the provisions of Law 24 of 2000, updated, regarding the fact that the solutions, contained in a normative act, must be thoroughly substantiated, taking into account the social interest, the legislative policy of the Romanian state and the requirements of correlation with all internal regulations , as well as the harmonization of the national legislation with the community legislation and with the international treaties to which Romania is a party.
Concretely, it must be said that the Emergency Ordinance no. 28 of March 25, 1999 on the obligation of economic operators to use electronic fiscal cash registers, provides, at art. 1, the fact that economic operators who collect in whole or in part, in cash or by using credit or debit cards, or cash substitutes, the value of services provided, directly to the population, are required to use electronic fiscal cash registers.
The special gambling legislation – GEO 77 of 2009, updated – stipulates that the amounts of money, deposited by players, by any form of collection, represent their participation fee in the game, which is the stake of the game, and the value of the service provided, to be registered by the organizer, in the form of income, is determined as the difference between the game fee collected and the prizes awarded.
The same definition, of the value of the amounts collected from the players, but viewed from the player’s perspective, is also found in Regulation (EU), no. Regulation (EC) No 549/2013 of the European Parliament and of the Council of 21 May 2013 – on the European System of National and Regional Accounts of the European Union – with mandatory applicability for all Member States:
“Definition: The amounts paid for lottery tickets or bets consist of two elements: payment for a service to the unit organizing the lottery or gambling and a current residual transfer to the winners.”
In order to understand the specific way in which gambling operations are carried out, below is a practical description of the steps taken and the operations that take place, until such time as a gambling organizer can determine, by calculations, the value of the service provided, as a component of the two elements set out above and representing, in practice, the difference between the amount of the participation fee collected from the players and the value of the prizes awarded to the winners:
1. The gambling organizer, based on the offer made to the participants in the game – according to the Rules of the game approved and then accepted by the players – collects from them a participation fee in the game, in the name and on behalf of the participants (players);
2. In exchange for the amounts deposited in the custody of the organizers, the participants of the game receive from them the right to participate in the game, through payment instruments defined by law as auxiliary means of play and which are found in practice in the form of: participation tickets ( bingo, lotto, betting), chips (casino), impulses (slots) etc .;
3. By depositing sums of money by the participants in the game and leaving them in the guarantee of the gambling organizer, in the form of a participation fee, players do not transfer ownership of these sums of money, and the organizer can not dispose of these receipts. In practice, these economic-financial operations are concluded, in fact, only after the end of the game and the distribution of the win due to the participants in the game, at which time the level of the amounts left for itself can be determined, in the form of income. provided by the organizer;
4. After the end of the game and after the prizes are awarded to the participants in the game, designated winners according to the Rules of the game, the organizer can dispose, for himself, of the remaining amounts of money, from the collected tax, amounts representing the income from providing gambling services;
Therefore, by maintaining this general rule and in total contradiction with the special provision on the organization and operation of gambling, economic operators are practically unable to comply, because:
– The participation fee collected does not represent the equivalent value of a service provided by the organizer and consequently he cannot issue to the participant a tax receipt in which the amount deposited is provided. The gambling organizer is obliged, instead, by the specific law, to grant in exchange for the amounts collected from the player, a right to participate in the game, by issuing auxiliary means of play, in the form of game participation tickets, chips , impulses, etc.;
– By the collection by the organizer of the participation fee, left in the custody of players, there is no change of ownership over the amounts deposited by participants in the game, those amounts are not collected as amounts representing the value of a service provided, consequently the organizer cannot issue a document certifying that an operation to change a property right has taken place, in the form of a tax receipt and / or invoice, as required by the current legal provisions;
– For the gambling organizer, the participation fee for the game is not an amount collected in his own name, but only an amount collected on behalf of the participants, therefore he cannot issue them a document attesting that he (the game organizer) can disposes, of his own free will, of these sums of money.
The fact that the organizers of gambling, as a result of the specific activity, do not collect from the players the value of the services provided, so they do not collect an income, led the European authorities to exempt gambling from the VAT Directive, in view of the fact that it is not known, at the time of the collection of the amounts from the players, a proportion that determines exactly how much of them represents the realized income and therefore what is the amount that could constitute the application of the value added tax. This exception is also found in the national legislation on value added tax, which clearly and unequivocally states that these amounts cannot be declared, by means of electronic fiscal cash registers, as representing the value of a service provided.
The above explanation can also be found in the judgment of 5 May 1994 in Glawe, by which the CJEU ruled on the applicable tax base for slot machines, but valid for all games of good luck and which stipulates that when, under the law, a certain percentage of the amounts at stake by players is distributed to them as a win. The Court stated that the VAT tax base consists only of the percentage of the amounts at stake that the gambling operator can actually dispose of for himself, which means that this percentage does not include the percentage of the total amounts at stake. which corresponds to the winnings paid to the players.
We also find in the jurisprudence of the CJEU the explanation according to which the VAT exemption, which benefits gambling, is motivated by purely practical considerations, related to the fact that gambling operations are not very suitable for the application of VAT. Thus, VAT is a consumption tax whose tax base is the amount received in exchange for the supply of a good or the provision of a service. This system is not easy to apply to gambling, in which consumers pay stakes in exchange for a chance to win, possibly higher.
Conclusions on the need to eliminate the obligation for gambling organizers to use electronic fiscal cash registers
This provision was introduced a long time ago and at that time there was no special law providing for restrictions and conditions for the organization and operation of gambling, so it is a legally and economically obsolete provision.
Gambling organizers may not be required by law to issue gambling participants with two documents with different legal and economic effects: one certifying ownership, the amounts left in the custody of the organizer and giving the player the right to to participate in the game and which are found in practice in the form of auxiliary means of play and a second document, for the same amount, stating that a sum of money has been collected and that this represents the value of a service provided and consequently had place a change of ownership over the amounts deposited.
Maintaining this provision violates the ownership of the amounts deposited by participants, in the custody of the organizer, in exchange for the right to participate in the game and at the same time, the gambling organizer should issue players a tax document certifying that he may dispose in his own name and without other obligations, of the amounts deposited by the participants, in the form of a participation fee.
Therefore, electronic tax cash registers should not be an obligation to use, for gambling organizers – due to the fact that it is collected from players stakes and not income.
It should also be noted that the gambling activity, which includes, among other things, the collection of amounts deposited by players, with the two elements that compose them – respectively stakes and income – is constantly supervised, monitored and controlled by the special body set up for this purpose. which permanently and in real time holds all the game data: the level of the participation fee for the game, the level of the prizes awarded as well as the income made by the organizer, as the difference between the first two elements.
In conclusion, the big problem that the Romanian gambling organizers will face is the fact that at ANAF, based on the connection of the fiscal cash registers, the amounts collected from the players will be registered as revenues (representing, in the opinion of ANAF officials, the value of some services provided directly to the population) although in reality they will collect, as before, gambling stakes. In this way there will be no concordances between the data transmitted through the connected tax houses and the incomes registered in their accounting records, with the obvious birth of some suspicions of tax evasion, money laundering ….. etc. through a simple and banal lack of correlation of regulations.
We return, in the following issues of the magazine, with other opinions on the activity of gambling …
