The practice of gambling in 2020 Gambling taxation in 2020
Article from the series “The practice of gambling”, by Anchidim Zăgrean, vice-president ROMBET
The Romanian Constitution clearly establishes that the taxes and any other income of the state budget and of the state social insurance budget are established only by law and the local taxes and taxes are established by the local or county councils, within the limits and under the conditions of the law. Also here we find the provision that the amounts representing contributions to the establishment of funds are used, according to the law, only according to their destination.
Starting from these general constitutional provisions, we can see that all the obligations of the nature of taxes and other contributions of the gambling organizers can be found either in the special law – GEO 77 of 2009 updated – or in the updated Tax Code, as we will continue to present them, with the mention that an online monthly fee has been introduced, through GEO 114 of 2018, for an additional monthly fee.
I. The obligations stipulated in GEO 77 of 2009, updated
1. Annual license fee – is fixed and due on each type of activity, in a fixed amount, in the range between 5,000 – 120,000 euros / year, which is declared and paid in advance as follows:
a) for the first year, until the 25th of the month following the month in which the documentation was approved;
b) for the next nine years, 10 days before the expiration of the previous year.
2. Annual authorization fee – is established and due, for each type of activity, in a lump sum, starting from a minimum of 1,500 euros / year to a maximum of 180,000 euros / year or as a percentage representing 16% of estimated income, but cannot be below the minimum limit set. In both cases, the tax declaration and payment are made in advance, and in the case of activities where the income is estimated, the authorization fee is recalculated and regularized monthly, by applying the 16% quota to the actual income realized. The exception is bingo games in the room, for which the annual authorization fee, calculated and due in advance, has a fixed component of 7,000 euros for each authorized room and a variable one, representing 3% of the nominal value of the printed game tickets.
3. Special taxes:
a) Annual fee – is established and due, only for slot machine games with unlimited risk and video games, in the amount of 400 euros / year, for each authorized station;
b) Special monthly fee for videotape – established and due in the form of a 3% share of the realized income;
c) Daily access tax – is fixed and due, as a fixed amount, by each person entering the specialized locations of casinos, in the amount of 50 lei and of the poker clubs, in the amount of 30 lei.
4. Annual contributions – established and due, in fixed amounts of 1,000 or 5,000 euros / year, by type of activity, to be used for the purpose of preventing gambling addiction.
5. Administrative fees – fixed and due, in a fixed amount, only in the case of remote gambling, for the analysis of documents, in the amount of 2,500 euros and for the issuance of the license, in the amount of 8,500 euros.
II. Obligation established by GEO 114 of 2018
Monthly fee – established and due, in the amount of 2% of the game participation fee, collected monthly, by all the online gambling organizers.
III. Obligations provided in the Fiscal Code
1. The tax on the income of micro-enterprises – mandatory tax for legal persons who: on December 31 of the previous year made incomes below the level of 1,000,000 euros; their share capital is owned by persons other than the state and the administrative-territorial units; it is not in dissolution, followed by liquidation, registered in the trade register or in the courts, according to the law.
The tax rates on the income of micro-enterprises are:
a) 1% of the income for micro-enterprises that have one or more employees;
b) 3% of the income for micro-enterprises that do not have employees.
2. Profit tax – established and due by those who do not fulfill the conditions for payment of the tax on the income of micro-enterprises and the tax rate on profit, which is applied to the taxable profit, is 16%. By way of exception, taxpayers who carry out activities of a casino nature, including legal entities that make these revenues under an association contract, and if the profit tax due for this activity is less than 5% of the respective revenues, are obliged to pay tax rate of 5% applied to these recorded revenues.
3. Compulsory income taxes and social contributions – established and payable by natural persons, withheld at the source by employers or payers, include:
A) Income taxes
a) Tax on salaries and assimilated to them – in a 10% quota applied to the tax base;
b) Dividend tax – in the 5% quota applied to the tax base;
c) Income tax on prizes and gambling:
– The tax on the income from prizes and contests – the revenues in the form of prizes are imposed, by withholding at the source, with a 10% share applied to the net income realized from each prize. The prizes under the value of the non-taxable amount established in the amount of 600 lei are not taxable, including, realized by the taxpayer for each prize;
– The tax on gambling income due is determined at each payment, by applying the following tax scale on each gross income received by a participant, from an organizer or payer of gambling income: up to 66,750, including, with 1%; over 66,750 – 445,000, inclusive, with 667.5 + 16% for what exceeds 66,750 and over 445,000 with 61,187.5 + 25% for what exceeds 445,000. The income obtained as a result of participating in the gambling characteristic of casinos, poker clubs, slot machines and slots under the value of the non-taxable amount of 66,750 lei, including, realized by the taxpayer for each gross income received, are not taxable.
The verification of the classification in the non-taxable ceiling is made on each payment, regardless of the type of game from which the respective income was obtained.
If the gross income received on each payment exceeds the non-taxable ceiling of 66,750 lei, including, the taxation is made separately from the income obtained from participating in other types of gambling.
B) Compulsory social contributions
a) Social insurance contributions due to the state social insurance budget – it is due by the natural persons who have the quality of employees or for whom there is the obligation to pay the social insurance contribution, in a 25% quota applied to the tax base;
b) Social health insurance contributions – it is due by the natural persons who have the quality of employees or for whom there is the obligation to pay the social health insurance contribution in a 10% rate applied to the tax base;
c) The insurance contribution for work – it is due to the natural and legal persons who have the status of employers or are assimilated to them, in a 2.25% quota applied to the tax base calculated as the sum of the gross gains realized from the salaries and incomes assimilated to the salaries.
4. VAT – transactions regarding the activity of bets, lotteries and other forms of gambling performed by the persons authorized, according to the law, to carry out such activities are exempt without the right of deduction.
5. Local taxes and fees – are due and calculated for:
a. building tax and building fee;
b. land tax and land fee;
c. tax on means of transport;
d. the fee for issuing certificates, notices and authorizations;
e. tax for the use of means for advertising and media;
f. show tax;