Taxing times: Russia, Austria & New Zealand

Authorities in Russia, Austria and New Zealand are all looking to boost tax revenue from online gambling.

Late last month Russia’s Ministry of Finance signed off on amendments to that country’s tax code, increasing the amount that Russian-licensed online bookmakers would have to pay from January 1st 2017.

That in itself is not major news. The quantum of the increase is. Bookmakers face an increase from a current monthly minimum of RUB 25,000 ($366), to RUB 2.5 to 3 million (US $36,600 to $43,900)!

That’s a lazy 100-fold increase. Enough to have operators choking on their  Stolichnaya.

Meanwhile, in the land of the long white cloud, moves toward a UK style point of consumption tax for offshore operators proposed last year are gathering pace. To this end, New Zealand’s Department of Internal Affairs last week released proposed amendments to the Racing Act 2003. Among the amendments is a 2% turnover tax on all bets placed by NZ punters with offshore operators.

It is hoped the new tax will generate an extra NZD 10 million annually. Unlike the UK’s POC tax measures, there will be no requirement for operators to obtain a local license and be subject to NZ regulation, making compliance with the tax largely voluntary.

In the words of the DIA, actual tax revenue collected would be,

“…highly dependent on the success of voluntary compliance and enforcement measures.” 

Good luck with that one!

In Austria, authorities are doing their best to collect on a recently introduced 40% tax levied on gross gaming revenue generated from Austrian gamblers. They contend that the tax should apply to operators licensed outside Austria (eg Malta, Gibraltar, UK). Not all operators agree. Mr Green is contesting the legality of the tax, having filed an appeal to the Austrian Administrative Court, as well as a complaint to the European Commission.

They may have a good case. The Court of Justice for the European Union has has already, in a separate (2014) case, issued a non-binding opinion that Austria’s online gambling laws are not consistent with EU law; specifically provisions related to the freedom movement of services.