Proposed UK Licensing and Tax Laws for Online Gambling Operators Deemed Approved
Many construe that the prolonged silence of the European Commission (E.C.) signifies the legislative body’s approval of UK’s proposed imposition of taxes and licensing laws on online gambling operators. Last month, the E.C. responded to the complaint filed by the Maltese gaming regulatory body, by adding another full-month to the three-month mandatory wait period. Now that more than a week has passed since the expiration of the extension, the European Commission chooses to remain silent, and therefore regarded as a sign that the E.C. has no objections to the said changes in UK’s gambling laws.
However, the same inference cannot apply to the proposed tax breaks, which the UK Treasury promised last Dec. 2012, to the publishers and developers of UK’s gaming industry. The commission came out with a press release last Tuesday that it intends to conduct a detailed investigation into the projected tax relief.
Under the proposed tax scheme, UK game developers will earn certain tax points if 75 percent of the game is set in the UK. Game developers also stand to earn additional points if they recorded at least 50 percent of the voice acting in a UK studio. The commission considers the proposed tax relief as one that could distort competition, since UK game developers will have an “unfair advantage” over counterparts doing business in other European countries.
Nonetheless, this recent development, even more strengthened the conjecture that the E.C. has no issues against UK’s proposed imposition of licensing requirements and Place of Consumption (POC) tax among the Internet gambling operators.