Several European governments are reviewing their online gambling laws, with taxes at the center of the debate. Taxation is a crucial, and often very controversial, issue. In general, governments have to choose between two different models: gross profits tax, sometimes called gross income tax, and turnover tax.
Turnover tax is a tax on every bet. In contrast, gross income tax is a tax on stakes minus winnings for traditional bookmakers, or for the commission charged to customers in the case of betting exchanges.
The 토토사이트 gaming industry has always been taxed on revenue. As a result, and because of its apparent simplicity, governments generally consider the turnover tax to be the default model to use for the online gambling industry.
While adopting a gross income tax model would allow licensed operators to offer innovative and highly competitive products to their customers, applying a turnover tax does the opposite.
In essence, this means that those operating in a tax environment that taxes turnover are unable to provide their customers with the best cost and value. This is a major flaw in a market without borders, where customers seek the best services, and if they are not satisfied with what they find in one jurisdiction, they look elsewhere.
With this system, governments lose out, collecting less tax revenue, because many operators do not comply with the law, preferring to operate on the black market.
It has been proven that the limited markets created by prohibitive tax regimes and financial lock-in measures, do not prevent consumers from accessing desired sites.
In fact, in a recent survey, only 35% of Norwegian online gamblers (Norway has adopted such blocking measures) said that the restrictions imposed by the authorities had made it more difficult for them to bet as before.
In France, the turnover tax system, accompanied by a too low return rate to players, has led to the inability of operators to offer low-margin products. As a result, only 36 companies have obtained a license from Arjel, even though the figures show that there are thousands of online gambling sites.
During a recent meeting of the Senate Committee, Jean-François Vilotte, the president of Arjel, acknowledged that the legal online betting market was doing well below expectations and that the tax system needed to be rethought.
Some European countries have moved towards the gross income tax system. Denmark will tax all online products on a gross profit basis, while Greece looks set to follow suit. Spain and Ireland have indicated their intention to tax betting exchanges according to gross income and the Italian regulatory framework provides the same for casinos and cash poker.