Malta which is one of the major European centres for online gambling recently made a complaint to the European Commission concerning the British government’s proposal to change its gambling laws. This proposed change would introduce a “point of consumption “ tax on all online gambling activity involving players in the United Kingdom.
At the moment only online gambling operators based in the United Kingdom pay taxes there. Under the new laws all operators wishing to offer internet gambling to players in the United Kingdom would have to pay a 15 per cent tax and have a United Kingdom licence.
Based on Malta’s complaint, the European Commission decided to extend the time it is giving to a review of the proposed internet gambling tax. Malta’s complaint is about the fact that the new British legislation would breach European Union law by giving British companies an advantage that would be unfair to offshore gambling operators. The fear for Malta is that if this new law were to be introduced in 2014 that companies already based in Malta would be obliged to move to the United Kingdom.
These companies would then pay their taxes in the United Kingdom and so Malta’s income from online gambling would be reduced.There is controversy within some European countries at the moment as some countries have been accused of breaching European Union laws on the movement of services between Union states by appearing to protect their own online gambling operators above offshore operators. Up to now the United Kingdom allowed operators with licences from other European Union countries to offer their services in Britain even if they weren’t paying taxes there. Now the government claims that it wants companies operating in the country to have a licence from the United Kingdom Gambling commission because those from other countries may not protect players enough. In its complaint Malta refutes this claim.