Ireland Online Gambling Tax
BETS PLACED BY Irish punters online will soon be taxed after laws that have taken over four years to be drafted are nearly complete.
Four years ago, Finance Minister Michael Noonan proposed a 1% tax on online gambling but the subsequent Betting Amendment Bill was significantly held up in Europe.
Paschal Donohoe said that it was “timely” to increase the current 1 per cent rate levied on all bets placed in the Republic of Ireland to 2 per cent for all bookmakers. Bookies face a doubling of. A new betting law is set to be enacted by the Irish President, paving the way for a long-delayed online gambling tax. The Betting (Amendment) Bill 2013 has been referred to the President for signature. The legislation brings into the licensing and taxation regime all remote bookmakers and betting intermediaries providing services to Irish. A new online betting tax that has been introduced in the Republic of Ireland is set to raise an additional €25 million ($31.6 million) per year for the country. Ireland’s plan to impose a one-percent tax on bets made online or over the phone from customers based in the country has been delayed into 2015, according to reporting from Reuters. Four years ago, Finance Minister Michael Noonan proposed a 1% tax on online gambling but the subsequent Betting Amendment Bill was significantly held up in Europe.
The problems centred on how to tax bets placed by people in Ireland using bookies based overseas and other issues relating to prosecution and enforcement.
Among the problems, the European Commission had concerns that the bill would affect the freedom of people in the Republic to place a bet with operators outside the jurisdiction.
It is estimated that €5 billion worth of bets have been placed by Irish gamblers online since 2012.
Ireland Online Gambling Tax Rates
Speaking in the Dáil last week in response to a question from Fianna Fáil’s Michael McGrath, Noonan says the bill will enter committee stage in the Seanad this week.
“The standstill period has now ended and Committee Stage is provisionally scheduled for the Seanad on 11 February,” Noonan said, adding that the duty would be applied “as soon as possible once the legislation has been enacted”.
The delay forced part of the Betting Amendment Bill to be removed and enacted as part of the Finance Bill last year. This provision saw bookmakers allowed to remain open until 10pm in the winter, reversing rules that came into force in 1931.
This change was welcomed by McGrath, who said it, along with the online duty, are both vital to allow bookie shops compete with online providers:
Ireland Online Gambling Tax Rate
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A long-debated tax on international online-gambling services who offer their services to Irish punters is set to become law, according to a statement from Ireland’s finance minister, Michael Noonan.
The tax change, in which remote (online) operators are required to pay 1% of their total revenue derived from Irish-facing online gambling sites, will go into effect later this year. The change has been debated sine 2011 in various forms, and was finally codified with the introduction and eventual passage of Ireland’s Betting (Amendment) Bill 2013.
The change to the applicable tax code for online-gambling providers extends a similar tax that has long existed in physical Irish betting shops, following the trend over the last 15 years of most sports wagers now being placed online. Irish market leader Paddy Power has disclosed that roughly three quarters of all its Ireland-derived revenue now occurs via online bets. The change, according to Paddy’s CFO, Cormac McCarthy, would have resulted in an eight million Euro tax levy for Paddy Power in 2014, and will likely result in a similar tax bill this year as well.
Paddy Power’s McCarthy made the comments in a brief press meeting following the announcement by finance minister Noonan of the bill’s imminent signing, as reported by Reuters and other sources.
The Irish online gambling bill mirrors in some aspects a controversial point-of-consumption tax that was implemented last year in Great Britain, and which remains under legal challenge in that country by a major Gibraltar trade association whose members are targeted by the online levy included in the UK’s Gambling (Licensing and Advertising) Act 2014.
Like the Irish measure, the UK act implements a tax on online services, whether or not the company or companies in question maintain a physical business presence in the country — either Ireland or the UK — where the punters and their betting action are physically located.
Several dozen prominent UK gambling firms have relocated to Gibraltar over the past decade to take advantage of the tax-free “online” loophole, as offered by Gibraltar. Those firms continue to battle the new UK tax regime under the auspices of the Gibraltar Betting and Gaming Association (GBGA), which counts roughly two dozen of the former British firms as members.
By comparison, Paddy Power remains tied to and proud of its Irish heritage, and remains incorporated in Dublin. However, like its industry competition, Paddy Power has also derived some measure of its recent corporate profits from the growing tax-free loophole, which the Irish tax-code modifications plan to slam shut.
The official signing of Ireland’s Betting (Amendment) Bill 2013 will take place in the coming days or weeks. The new law will then implement a brief grace period allowing all firms offering online services to Irish punters to obtain licensing from Ireland.
Ireland’s change continues to highlight a growing point of contention between online-gambling service providers and those countries who chose to license them: Whether taxes on the service should be based on point of consumption (where the bettors live) or country of incorporation. EU outposts such as Gibraltar and Malta have transformed themselves into tax havens catering to the online gambling industry, and their national revenue streams increasingly depend on the licensing regimes associated with that activity.
The shift by many other countries to point-of-consumption taxation frameworks directly threatens the tax-haven status of Gibraltar, Malta, and other remote licensing jurisdictions. Maltese government regulators in particular have previously decried both the Irish and UK tax implementations as an alleged violation of EU “free trade of services” agreements.
