Operators are facing new tax bands

Operators are facing new tax bands

Gambling operators in Romania are currently going through a rough patch in the context of the recent regulatory adjustments in the Fiscal Code. The new regulations that are forcing them to increase the taxes on player winnings were approved by the country’s Parliament and will go into effect on August 1. All licensed online and brick-and-mortar gaming operators will need to apply a new withholding tax structure on players’ winnings. All gaming will have taxes applied to them. An amendment to the betting taxes part of the Fiscal Code was proposed by government members. The tax contribution from the gambling industry in the country was supposed to be boosted by the measure.

The latest withholdings taxes will start at 3% for players’ winnings that do not go over RON 10,000, followed by a 20% tax for winnings between RON 10,000 and RON 66,750. A 40% tax will be imposed on winning over RON 66,750.

The tax band 1% has been applied to players winnings below the RON 66,750 mark. The winnings between RON 66,750 and RON 445,000 were subject to a 16% tax, while winnings over RON 445,000 were subject to a 25% tax.

Operators who want to have their licenses renewed will have to pay a brand new fee. The tax will go from $122,780 to $327,436.

A standstill period on the new taxes has been requested by the AOJND in the country. AOJND thinks gambling operators should be given more time to talk about the new taxes. The trade association referred to the new tax bands as penalties for recreational players. 80% of the players winnings were smaller than RON 1,000.

The AOJND warned that the new Fiscal Code changes will affect most of the players that use licensed operators.

The new changes are expected to reduce the number of players on licensed websites and encourage them to migrate to illegal sites.

Summary:

Gambling operators in Romania will have to apply a new withholding tax structure on players’ winnings starting August 1. All licensed online and brick-and-mortar gaming operators will need to apply a new withholding tax structure on players’ winnings. The latest withholdings taxes will start at 3% for players’ winnings that don’t go over RON 10,000, followed by a 20% tax for winnings between RON 10,000 and RON 66,750.