Tax assistance on gambling project

Elena Mashina

One of the questions that arise before opening a gambling project is taxation. Tax risks also need to be prevented. First of all, taxation depends on the chosen jurisdiction. You can read about how much tax you need to pay and where, in this article.

Table of Contents:

What taxes does a gambling project need to pay?

Even though taxes vary from country to country, there are some general aspects which should be taken into account in any case, regardless of the jurisdiction.

First of all, you must pay attention to the gambling tax (gambling/betting tax). Then we should consider corporate income tax (CIT). Beneficiaries should also think about tax rate on shareholders' dividends. There may be situations when the last tax falls away:

The law does not provide for taxation of dividends received from a foreign company;
Double taxation treaty limits tax on dividends.

Possible jurisdictions to choose taxation of gambling projects

Taxation of gambling in Malta

Considering taxation in Malta, a large proportion funds the company has to pay to the state is licensing fee. They depend on the type of license. There are 4 types of license in total, depending on the specific type of gambling. You can read more about gambling license in Malta in our article. The license fees are:

For revenues up to 3 million euros.
For a License type 1 - 1.25%, but not less than 15 thousand and not more than 375 thousand;
For a License type 2 - 4%, but not less than 25 thousand and not more than 600 thousand;
For revenues up to 2 million euros.
For a License type 3 - 4% but not less than 25 thousand and not more than 500 thousand;
For License type 4 - 0.5%, but not less than 5 thousand and not more than 500 thousand.

Tax on gambling activities itself is 5% of income derived from the Maltese players.

Taxation of gambling in the UK

Gambling tax can be in two forms:

Betting Duty, which is calculated on the total number of bets made. It amounts to 15%;
Remote Gaming Duty, which depends on bets made remotely, including online. It amounts to 21%.

Taxation of gambling in Gibraltar

Gambling tax is 0.15% of turnover up to 42, 5 million sterling, but not less than 85,000 thousand and not more than 425,000 a year. In addition, you must pay corporate income tax, which, generally, is 10%.

Taxation of gambling on Isle of Man

Gambling tax is subject to gambling activities, including betting, lotteries and online gambling. The tax rate depends on the amount of profit (gross gaming yield):

Up to £20 million - 1.5%;
From £20 million to £40 million - 0.5%;
Over £40 million - 0.1%;
For sports betting (pool betting) - 15%.

The calculation of taxes - one of the main issues when creating a gambling business. This issue should be considered at the stage of choosing a jurisdiction. Opening a gambling project two taxes must be considered: gambling tax and corporate income tax. The most popular jurisdictions are Malta, UK, Isle of Man, Gibraltar. Our team of lawyers will help you to choose the most suitable jurisdiction for you and calculate the potential taxes for your gambling project.