GBGA Protests UK Taxation: EU High Court ListensPublished July 15, 2015 by Lee R
This case is a solid indicator that the EU is a proponent of iGaming.
A complaint by the Gibraltar Betting and Gaming Association regarding its treatment by UK tax laws will be heard by the European Union Court of Justice.
In a significant step forward for protection of private providers against exorbitant national taxing measures, international TMT law firm and GBGA legal representative Olswang secured a reference to the Court of Justice of the European Union for the GBGA appeal on the legality of a UK tax imposed on overseas gambling operators.
Justice Charles of the High European Court ruled that the UK tax on online gambling brought into effect by Britain's Finance Act of 2014 could potentially conflict with EU law, and saw fit to refer to the matter to the Court of Justice of the European Union.
The reforms in question altered the UK taxation system so that offshore operators would be liable for taxation payable to the UK government, above and beyond the taxes they pay in their respective jurisdictions of origin.
Purpose Goes Astray
The tax was expected to raise some £300 million per year from overseas operators for the UK government, but that figure would in its current form come out of the pockets of all taxpaying foreign operators from gambling transactions on their ledgers whom the British government would deem “UK persons.” This potentially doubles the taxation burden on operators.
The case itself dates back to October 2014, when the GBGA enlisted Olswang to file a request for a judicial review by the High Court. The GBGA claimed discrimination and restriction of free movement of services within the EU, in conflict the Treaty on the Functioning of the European Union.
EU Precedent Coming Up
The EU is listening, and the results of the case will set a clear precedent for the parameters of taxation which individual EU governments are at this point imposing arbitrarily on independent and offshore iGaming operators.