The practice of gambling in 2021
The system of special taxes in the gambling activity in Romania
During this period, in which the current activity of traditional gambling was deeply affected, as a result of measures to restrict or close gambling locations, by declaring a state of emergency or alert, a series of discussions, opinions or even some concrete measures taken by the authorities, in order to establish the level of taxes and special duties due, as a result of these restrictive measures adopted by the Romanian state.
In order to clarify these measures, which are likely to substantially influence the results of this activity, it is increasingly necessary to establish clearly and unequivocally the nature and economic content of these taxes and duties and the objective and real classification of these obligations in the European taxation system.
The Romanian Constitution establishes, unequivocally, the fact that taxes, fees and any other revenues of the state budget are established only by law. Here we also find the provision according to which the amounts representing the contributions to the establishment of some funds are used, in accordance with the law, only according to their destination.
Starting from these general constitutional provisions, we find that the obligations, such as special taxes due by gambling organizers, are found in the special law – GEO 77 of 2009 updated – stating that for online gambling was introduced by GEO 114 of 2018, another additional monthly fee.
The special taxes, provided by GEO 77 of 2009 and GEO 114 of 2018, in brief presentation, are:
1. Annual license fee – is set and due, for each type of activity, in a fixed amount, and this tax 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. The annual authorization fee – is established and due, for each type of activity, in a lump sum or as a percentage of the estimated income, but cannot be below the minimum limit established by law. In both cases, the declaration and payment of the tax is 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 quota to the actual income achieved.
The exception is the bingo games in the hall, for which the annual authorization fee, calculated and due in advance, has, for each authorized hall, a fixed and a variable component;
3. Monthly fee – set and due, as a percentage of the participation fee in the game collected monthly, by the organizers of online gambling.
4. Special fees:
a) Annual addiction fee – is established and due, only for slot-machine games with unlimited risk and video lottery games, for each authorized station;
b) The special monthly fee for video lottery – established and due in the form of a percentage of the realized income;
c) Daily access fee – is set and due, as a fixed amount, by each person who enters the specialized locations of casinos and poker clubs.
5. Administrative fees – established and due, in a fixed amount, only in the case of remote gambling, for the analysis of documents and for the issuance of the license;
6. Annual contributions – established and due, in fixed amounts, by types of activity, to be used in order to prevent gambling addiction.
In the public discussions as well as at the meetings organized by the profile associations with representatives of the responsible public authorities, on the regulatory area in the field, several variants regarding the content of these special taxes were circulated, most of the opinions expressed supporting the idea that they would represent purchases of services provided by the state in favor of the organizers of gambling or more directly, the fact that by paying these taxes was purchased a right to operate an activity that constitutes a state monopoly.
In order to establish, without any doubt, the nature and economic content, as well as the place of these tax obligations, in the structure of the European tax system,below are presented, in the extract, their definitions with express reference to gambling, as find in EU Regulation 549 of 2013, a mandatory regulation to be applied by all Member States:
· Taxes on products – consist of mandatory payments without counterparty, in cash or in kind, collected by general government representing taxes on goods and services, which are payable as a result of the delivery of those goods or services or as a result of their use for own consumption, or capital formation for own use, including in particular taxes on lotteries, gambling and betting, other than on winnings;
· The amounts paid for lottery tickets or bets consist of two elements: payment for a service to the unit that organizes the lottery or gambling and a residual current transfer to the winners. Payment for the service can be substantial and includes taxes on the production of gambling services;
· Income taxes consist of taxes on income, profits and capital gains, measured in relation to the actual or assumed income of individuals, households, corporations and include taxes on winnings from lotteries or games of chance, payable in relation to the amounts received by winners, as opposed to taxes on the turnover of producers who organize these activities, which are treated as taxes on products;
· Other taxes on production include taxes paid by undertakings for operating or professional licenses, if those licenses are granted automatically upon payment of the amounts due. In this case, they are likely to be only a means of generating revenue, even if the general government may instead grant a certificate or authorization. However, if the public administration uses the issuance of licenses to exercise an appropriate regulatory function, for example, when the public administration carries out checks on the conformity or security of the company’s premises, the reliability or security of the equipment used, the professional competence of staff employed or to the quality or standards of the goods or services produced as a condition for granting such a license, payments are treated as purchases of services provided, unless the amounts charged for licenses are very disproportionate to the costs of administrative checks publish.
As a result of these provisions, from EU Regulation 549 and mandatory for Romania, a series of observations can be highlighted, strictly related to the special gambling tax system as well as the way to establish their level during the state of emergency or alert:
a) the notion of a fiscal obligation (tax, fee, contribution… .etc.) is not of any importance for its definition, it is important to establish its nature and economic content;
b) establishing very clearly that the level of an obligation to pay, in order to represent an actual purchase of a service from a public authority, must not be disproportionate to the volume of the service performed;
c) when the State intervenes, with restrictions or closure of activity, for certain periods of time, the taxes due must be recalculated and adjusted, as a result of the fact that they represent taxes on services and must be paid as a result of the delivery of those services.
We return, in the following issues of the magazine, with other opinions on the activity of gambling …