The practice of gambling in 2022
Opinion regarding non-compliance with European rules, by the decision-making authorities, regarding the special regulation of gambling activities in Romania
Continued of the article from the previous issue
As we specified in the previous article, the special regulations regarding the organization and exploitation of gambling had to be limited exclusively to the exceptions provided for in articles 51 and 52 of the Treaty on the Functioning of the European Union (TFEU), in the sense that, in the special national rules adopted, the transposition of these exceptions was to be found only in the form of restrictions absolutely necessary for the application of national policies in terms of order, safety and public health.
In reality, for the implementation of the EU rules, by adopting the national rules, it extends (by including in the special regulation) to the taxation system of the gambling activity, with a major impact on the organizers as well as on the players, even if the European rules remove in evidence, very clearly, the fact that the level and the system by which the fiscal revenues of the state budget are ensured, it is not among the reasons mentioned in Article 52 of the TFEU and therefore does not constitute an imperative reason of general interest.
If the Romanian authorities had respected the European rules, as they committed to through the accession treaty, then the transposition into the internal rules of the national taxation system, of the gambling activity, should have respected the provisions of Directive 2006/112 /CE, regarding the common value added tax system as well as those of Regulation (EU) no. 549/2013.
Below is a review of the provisions that had to be taken into account, at the time of the adoption of the special gambling regulations, regarding the taxation system of this activity:
1. In the case of Directive 2006/112/EC, regarding the common value added tax system, it is about the provisions of art. 135, lit. i, as well as those of art. 401, as follows: “Article 135 (1) Member States shall exempt the following operations: (i) betting, lotteries and other forms of gambling, subject to the conditions and restrictions established by each Member State;”
“Article 401 Without prejudice to other provisions of Community law, this Directive shall not prevent any Member State from maintaining or introducing taxes on insurance contracts, taxes on gambling and sports betting, excise duties, stamp duties or, more generally, any taxes, duties or taxes that cannot be characterized as turnover taxes, provided that the collection of these taxes, duties and taxes does not give rise, in trade between member states, to formalities related to the crossing of borders.”
2. In the case of Regulation (EU) no. 549/2013, can be found, in the form of definitions, of any of the taxation formulas to be adopted by national rules, for the gambling activity, regarding the result to be achieved, according to the provisions of art. 401 of Directive 2006/112/EC, as follows:
“Product taxes (D.21)
4.16. Definition: taxes on products (D.21) are taxes payable per unit of good or service produced or traded. The tax may be a specific amount per unit quantity of the good or service, or may be calculated as a specified percentage of the unit price or value of the goods and services produced or traded. Taxes assessed on a product, regardless of which institutional unit pays the tax, are included in product taxes, unless specifically included under another heading.
Taxes on products, exclusive of VAT and taxes on imports (D.214)
4.19. Definition: taxes on products, excluding VAT and taxes on imports (D.214) consist of taxes on goods and services that are payable as a result of the production, export, sale, transfer, leasing or supply of those goods or services or as a result of their use for own consumption or the formation of capital for own use.
4.20. This heading includes in particular:
(f) taxes on lotteries, games of chance and betting, other than those on winnings;
Income taxes (D.51)
4.78. Definition: Income taxes (D.51) consist of taxes on income, profits and capital gains. They are assessed in relation to the actual or assumed incomes of individuals, households, companies and IFSLs. They include taxes assessed in relation to holdings of property, land or immovable assets where these holdings are used as a basis for estimating the income of their owners.
Income taxes include:
(d) taxes on winnings from lotteries or games of chance, payable in relation to the amounts received by the winners, different from turnover taxes of the producers who organize these activities, which are treated as taxes on products.”
In this context, we must recall the fact that, based on the provisions of art. 288 of the TFEU, regarding the exercise of EU powers, the member states have the obligation to comply with the imperative provision: “To exercise the powers of the Union, the institutions adopt regulations, directives, decisions, recommendations and opinions. The regulation has general applicability. It is binding in all its elements and directly applicable in each Member State. The Directive is binding on each recipient member state, leaving the competence of the form and means to the national authorities.”
To be continued in the next issue of the magazine…