Bulgaria expected to halve gambling tax rate
Tax slashed after government admits 15% GPT made market unattractive to foreign operators.
Reports from Bulgaria suggest that the country’s ruling Citizens for European Development of Bulgaria (CEDB) party is to cut the proposed rate of tax on egaming operators by half.
A member of the country’s Parliamentary Budget and Finance Committee told radio station Bulgaria on Air that a 15% gross profit tax (GPT) had been seen as too restrictive, and would dissuade private operators from entering the market: “”¦ [N]o foreign operator would come to Bulgaria, because the taxation would be very high. In practice the tax in Bulgaria is twice bigger that in France or Malta.”
The decision was taken ahead of the opening of the country’s online gambling market, with licences expected to be issued by July, according to the founder of the Bulgarian Gaming Association (BTAMOGI). Under the terms of legislation “ approved by the EU in June 2011 “ egaming companies are required to have at least five years’ experience of operating in the market and a physical presence in the country, but will now only have to pay a 6% or 8% GPT rate.
Land-based operators will be subject to the same rate of tax, but will also have to operate a minimum number of gaming machines in each venue, which has drawn criticism from local companies who fear they will be forced to close venues in order to comply with regulation.
However, after it was submitted to the European Commission in March 2011, it was ratified in June with the EC stating: “The draft Law complies with European standards in this sphere and is consistent with the functioning of a common market.”
The slashing of the gambling tax rate is Bulgaria’s latest move to ensure a fair, secure online gambling market. In March the country’s parliament passed a motion to mandate internet service providers to block unlicensed gambling sites ahead of the market opening.