Online Casino Style: News - Gibraltar to See Tax Increase

12/31/2010		Online Casino Style - News: Gibraltar to See Tax Increase
Home History Games News Dictionary		Unfortunate changes have been confirmed to be in the future for one of the homes of online gambling this week, as a decision has been made in regards to the taxation future for internet casino companies based on the island of Gibraltar. The same region that was considered one of the most attractive for online gambling firms to base their operations in 2010 will see a ten-fold increase in their taxes next year, jumping from the exceedingly friendly rate of 1 percent, to the not-nearly-as-much rate of 10 percent in just a matter of months. According to a report by the UK newspaper The Guardian, the local online gambling industry is big enough for such a small piece of property, with more than 2,000 employees in the field, making up 12 percent of the entire workforce. The surge of interest – as well as the resulting move of popular and major internet casino groups to Gibraltar in recent months – has helped insulate the locale economy from the same economic woes that have plagued the nearby Spanish. Among those groups who have recently made the move are huge and very lucrative internet gambling brands such as Ladbrokes and William Hill. They did so, taking their base operations out of the UK in order to better compete with offshore rivals, escaping high taxation rates – only to now find out that they’ll be losing a significant portion of their advantage. The only advantage now will be to the government, which will be increasing their profits significantly, with no additional work. In 2009, they brought in €12.4 million through the 1 percent taxes on online gambling; that number will increase tenfold at the minimum with the new tax rates, in addition to the new groups having established themselves here. The concern, now, is that those same groups who came running, looking for tax advantages, will abandon ship once again, moving elsewhere to somewhere where taxes are lower. The existing law dictates that online gambling companies are responsible for paying a 1 percent tax on their business, completes with a maximum of €500,000 a year. The upside is that despite the increase, the firms will still not be held liable for any VAT, with the government hoping that the fact will be enough incentive to keep the tax regime relatively attractive. "To comply with EU law we must phase out the tax-exempt company system in 2010," Gibraltar's first minister, Peter Caruana said. "However, in order to sustain our successful economic model we must retain a commitment to a very competitive corporate tax model." At least some will stay, to be sure, as a statement from the veteran online gambling company Victor Chandler to the newspaper El Pais said that, “Nobody will leave, although we’ll all complain about the tax going up.”

12/31/2010

Online Casino Style - News:
Gibraltar to See Tax Increase

Unfortunate changes have been confirmed to be in the future for one of the homes of online gambling this week, as a decision has been made in regards to the taxation future for internet casino companies based on the island of Gibraltar. The same region that was considered one of the most attractive for online gambling firms to base their operations in 2010 will see a ten-fold increase in their taxes next year, jumping from the exceedingly friendly rate of 1 percent, to the not-nearly-as-much rate of 10 percent in just a matter of months.

According to a report by the UK newspaper The Guardian, the local online gambling industry is big enough for such a small piece of property, with more than 2,000 employees in the field, making up 12 percent of the entire workforce. The surge of interest – as well as the resulting move of popular and major internet casino groups to Gibraltar in recent months – has helped insulate the locale economy from the same economic woes that have plagued the nearby Spanish.

Among those groups who have recently made the move are huge and very lucrative internet gambling brands such as Ladbrokes and William Hill. They did so, taking their base operations out of the UK in order to better compete with offshore rivals, escaping high taxation rates – only to now find out that they’ll be losing a significant portion of their advantage.

The only advantage now will be to the government, which will be increasing their profits significantly, with no additional work. In 2009, they brought in €12.4 million through the 1 percent taxes on online gambling; that number will increase tenfold at the minimum with the new tax rates, in addition to the new groups having established themselves here. The concern, now, is that those same groups who came running, looking for tax advantages, will abandon ship once again, moving elsewhere to somewhere where taxes are lower.

The existing law dictates that online gambling companies are responsible for paying a 1 percent tax on their business, completes with a maximum of €500,000 a year. The upside is that despite the increase, the firms will still not be held liable for any VAT, with the government hoping that the fact will be enough incentive to keep the tax regime relatively attractive.

"To comply with EU law we must phase out the tax-exempt company system in 2010," Gibraltar's first minister, Peter Caruana said. "However, in order to sustain our successful economic model we must retain a commitment to a very competitive corporate tax model." At least some will stay, to be sure, as a statement from the veteran online gambling company Victor Chandler to the newspaper El Pais said that, “Nobody will leave, although we’ll all complain about the tax going up.”