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Danish E-gaming Liberalization Meets Opposition

by Ulrika Lomas, Tax-News.com, Brussels

16 June 2010


Danish casinos and gaming operators have lodged a complaint with the European Commission concerning the discrepancy between the rates of taxation on online gambling compared with their land-based businesses. This threatens the progress of the newly passed gaming laws.

Under the new law passed on June 4 online gambling was to be taxed at a 20% rate, while land-based casinos pay 45% to 75%. The annual licensing fee has been set at EUR140,000.

Director of the Danish Gaming Association, Gunnar Sorensen, commented: "We think it is illegal for the government to support internet gambling in this way. If two gambling companies do not have the same tax treatment, then the Danish government is effectively supporting the online gambling companies."

The law was set to take effect from July 1, 2010, but the issuance of new licenses would not take place before January 2011, giving the state-run monopoly Danske Spil, which already has a license, a six months' head start. The bill has now been amended to allow the finance minister to set a new effective date if necessary.

Danske Spil has contracted with Party Poker to use their casino and poker platforms from 2011, but has been forced to retender the contract, following a complaint from Playtech about unfair procedures.

To obtain a Danish license, a physical presence in Denmark is required, together with an audit of the licensee's accounting systems to ensure that reporting structures for Danish taxation are satisfactory. Although the Danish government had earlier been taken to task by the European Commission on account of ISP blocking measures, such sanctions against unlicensed operators are still a feature of the new law.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: tax | business | European Commission | Denmark | gambling tax | commerce | law | accounting | audit | offshore | internet | e-commerce | gambling | licensing | legislation | offshore e-gaming | regulation | European Union (EU) | Europe

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