Question 27 October 2020 Idoia Villanueva Ruiz (GUE/NGL)
Subject: Taxation of betting firm operators in EU territories offering tax breaks
Some EU territories are able to act, in practice, as tax havens owing to the favourable tax conditions applied to them. In Spain, the Partido Popular government changed the betting tax rules for online gambling in 2018, cutting gambling taxes to 10 % in the autonomous cities of Ceuta and Melilla, compared to 20 % in the rest of the country. This change came about in order to ‘compete’ with Gibraltar.
Following this, the company Codere, one of the betting firms most commonly found in towns and city districts in Spain, moved its head office from Madrid to Melilla. Other companies have also ‘relocated’ their business. Ireland and the Netherlands are further examples of countries with low taxation rates and lax tax legislation that attract huge amounts of foreign investment while causing tax revenue to fall in other EU countries.
The WHO considers compulsive gambling to be an illness. Its effects have spread owing to the proliferation of these companies that make a business out of exploiting vulnerabilities in society.
What plans does the Commission have to stop online betting firm operators paying their taxes in EU territories that are, in practice, tax havens on account of the tax advantages they offer?
Answer 13 January 2020 Mr Gentiloni
The Commission shares the view that all companies, including those engaged in online gambling, should pay their fair share and has taken unprecedented action to promote fair tax competition and combat tax avoidance.
Member States are obliged to comply with a number of EU and international standards to reduce the risk of base erosion and profit shifting, e.g. Directive on Administrative Cooperation (1) and Anti-tax Avoidance Directive (2). In addition, their preferential tax regimes are under review through the work of the Code of Conduct Group (Business Taxation). Additionally, in the framework of the European Semester the Commission also examines the issue of aggressive tax planning practices and, if necessary, makes recommendations. This issue has also been highlighted in the recently issued guidance to Member States for their Recovery and Resilience Plans (3).
In the context of the taxation of digital services, such as online gambling, the Commission actively participates in international discussions taking place in the Organisation for Economic Cooperation and Development concerning the reform of the corporate taxation framework. The combination of the measures that are under consideration should ensure fair taxation for large multinational groups by allowing jurisdictions to tax profits earned through value created in their territories and to ensure a minimum level of taxation for profits.
|(1)||Council Directive 2011/16/EU of 15 February 2011, as amended|
|(2)||Council Directive (EU) 2016/1164 of 12 July 2016, as amended|