Spain Demands Back Taxes from Online Gambling Operators

Spain Demands Back Taxes from Online Gambling OperatorsHaving already extended its spring 2012 deadline for the issuing of online gambling licences to June 1st, the Spanish government which will impose the European Union’s highest gross profits tax of 25%, is now requiring operators who wish to enter the Spanish online gambling market to settle back taxes (See article: New date for issuing of Spanish online gambling licences). The back taxes are based on two laws which date from the 1960s and 1970s and which related to operators within Spain and not to offshore online gambling operators. While the granting of a Spanish online gambling licence isn’t necessarily linked to these back taxes being paid, several operators who wish to enter the Spanish market are settling back taxes with the Spanish Ministry of Finance.One major operator hoping to be granted a Spanish online gambling licence is Bwin.Party Digital entertainment. Bwin.Party was launched last year after Bwin, the online gaming and betting group and Party Gaming merged and it is now one of the world’s largest online gambling operators. The taxes involved are retrospective from 2009 to 2011 to cover a time when certain operators were operating within the Spanish market before the Spanish Gaming Act was passed in May of last year. The Spanish Gaming Act will regulate the online gaming industry. Under an agreement following discussions with Spanish officials Bwin.party Digital Entertainment will pay 33 million euros in back taxes. This amount is made up of 25.6 million euros in taxes and the remainder is interest payments and surcharges.

Sportingbet, a British online gambling group, is another company having talks with the Spanish authorities concerning the payment of retrospective taxes. Like Bwin.Party, Sportingbet hopes to be granted a Spanish online gaming licence in June. The Spanish regulator has received applications for online gaming licences from fifty nine operators wishing to enter its lucrative online gaming market. Gibraltar based 888 Holdings Plc, one of the world’s most popular online gaming entertainment and solutions providers is having discussions with the Spanish authorities regarding its position with the payment of back taxes. It also hopes to be granted a licence in June 2012.

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