Stakeholders in Ukraine have emphasised progress on the gaming tax framework, which is needed to finalise the market parameters of the federally authorised Ukraine Gambling Law.
The first reading of modifications to the Gambling Law’s “tax code” was passed by the Verkhovna Rada (federal parliament) yesterday.
In addition to remaining technical certificates, the Rada has yet to agree on the final tax structure for the Gambling Law, which was passed by the federal government in July.
The Committee on Tax and Finance suggested that the Gambling Law keep a single 10 percent GGR tax rate that applies to all regulated verticals, rather than the former tiered percent tax structure.
The Rada has approved the Committee’s proposal, which will apply Ukraine’s ordinary 18 percent income tax on licenced enterprises, with GGR charges being deductible.
Triple operators fee
Significantly, the Rada has decided to stop charging operators an expensive “triple fee” for their slot machines, betting points, and online casino games inventories.
The Gambling Law will keep its $200,000 yearly licencing charge for online casinos. Operators that have paid the ‘triple fee’ charges will have their annual licence payments credited to them in the future.
Despite operator protests, the Gambling Law will preserve its tax on player wins, which will be levied on net earnings of more than €1,500, and in which casino operators must calculate a player’s wagering activity over a 24-hour period.
Despite the Rada’s delayed process in finalising the Gambling Law’s tax policies, the first reading of the gambling tax law should be recognised as a significant step forward, as revisions are authorised before the Rada’s summer holiday.
As things stand, Ukraine’s current tax dispute involving gambling will most likely end in the fall of 2021.