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Gibraltar Contemplates Legal Action Re UK Tax


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The UK government’s proposed ‘point of consumption’ online gambling tax has
ruffled many feathers in the industry, including those in the well-known
online gaming jurisdiction of Gibraltar
, which is reportedly contemplating
legal challenge if the tax is imposed.

The reason many online gambling-related
figures in Gibraltar are up-in-arms about the UK consumption tax is that it
could have far-reaching consequences to Gibraltar’s economy, which relies
heavily on taxes imposed on the many online gaming firms based, licensed and
regulated there.

If the UK government gets its way, regardless of where in the world internet
gambling companies are based, licensed and regulated, their UK players will be
subject to taxes in the UK, effectively cutting much-needed tax revenue streams
in those jurisdictions.

Issue to be Addressed at Gibraltar eGaming Summit

This highly contentious issue is expected to be addressed this week in Gibraltar
as part of a KPMG-organised eGaming summit which kicks off today. Many leading
figures in the Gibraltar gaming industry are expected to meet with HM Treasury
representative Maria Brennan – who will be accompanied by a representative of HM
Revenue & Customs – to discuss the implications in greater detail.

But it’s
not just the ‘Rock’s’ online gambling industry executives who are riled at the
proposed tax, as even Gibraltar’s Minister Fabian Picardo, and his predecessor
Peter Caruana, have voiced their concerns about the tax and the economic
implications it could have on Gibraltar. Each has warned of the financial
dangers of slashing one of the territory’s key income streams.

It’s no secret that Gibraltar’s online gaming industry employs around 2,200
people, many of whom could potentially lose their jobs if the industry is hard
hit by the UK online gaming tax move.

Aim is to Levy a 15% Tax on all Players in UK

Two leading UK bookmakers – Ladbrokes and William Hill – relocated from England
to Gibraltar purposefully to escape the UK’s high online gambling taxes.
However, the proposed consumption tax could prove to make their moves ultimately
redundant. The reason being that if Chancellor George Osborne gets his way, by
as early as 2015 a 15 per cent tax will be levied on all players that reside in
the UK, which will have a major impact on the two betting firms.

The eGaming
summit will get underway today with an opening seminar led by Gibraltar Gaming
Minister Gilbert Licudi, who together with Picardo, met with UK gaming officials
and ministers in January in London. According to Licudi, the UK’s position on
the online gambling point of consumption tax is indefensible and must be
addressed.

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