Eurocámara: 130603 E­004280­/ 2013 Gibraltar and its tax concessions for online gambling operators

Pregunta de M Tarabella (S&D-PS)

Respuesta del Comisario Šemeta

DOCUMENTOS REFERENCIADOS ADJUNTOS EN PDF

Question 16 April 2013 M Tarabella (S&D-PS)

Subject: Gibraltar and its tax concessions for online gambling operators

Gibraltar’s appeal to gambling operators has little to do with its tourist attractions. There would be nothing to distinguish the island from other tourist destinations were it not for the tax concessions it grants to investors.

Online poker and casino sites which base their operations in Gibraltar can provide services both to contries which are already moving towards mor relaxed gambling laws and to those which still impose restrictive meaures. The could of course choose other locations such as Antigua or de Kahnawake reserve, but they prefer to stay in Gibraltar, whcih has the advantage of being close to Europe and is at present the most lucrative site for their operations.
 
With a 15% tax rate on profits, it is not hard to see why companies decide to set up operations there.

1. In view of the fact that the Commission is currently working to combat tax evasion and tax havens, what action is it planning to take in respect of Gibraltar and the online gambling operators which have established themselves on the island in order to enjoy its tax breaks?

2. Are the Gibraltar­based online gambling companies not engaging in unfair competition against companies providing the same services in Member States which are not tax havens?

3. Has the Commission commissioned, or is it planning to commission, an impact analysis of gambling operations in Gibraltar, in terms of job creation or losses in Europe, for example?

Answer 3 June 2013 Commissioner Šemeta

1 and 3. The Commission is not currently taking any actions in the area of direct taxation specifically targeting online gambling operators established in Gibraltar, nor is the Commission planning to undertake an impact analysis of gambling operations in Gibraltar.

Member States are entitled to establish the tax regimes they see fit, so long as these comply with EC law.

2. The Code of Conduct Group, established by Member States to combat unfair tax competition, has recently reviewed Gibraltar’s 2010 Income Tax Act. In its report to the Council dated 23 November 2012(1) the Group concluded that certain aspects of the Act, which do not relate to online gambling, were harmful. The United Kingdom has already informed the Group about work already begun to ensure compliance with the principles of the Code.

Other Member States are free to introduce such anti­abuse measures as they think are necessary to defend their tax bases, so long as they comply with EC law

Regarding indirect tax, although Gibraltar is outside the territorial scope of VAT, online gambling falls within rules for tax on business to customers electronically supplied services. There is no blanket exemption from VAT for gambling and tax may be due depending on where customers are located and how Member States implement any exemption.

(1)   Document 16488/12 FISC 173.

130603 EP – Q M Tarabella (S&D-PS) on Gibraltar and its tax concessions for online gambling operators, A Com Taxation Semeta E-004280-2013.pdf