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Gibraltar has lost its legal challenge against the UK's tax on remote gambling operators who provide services to UK consumers.
The Finance Act 2014 introduced a new gambling tax regime requiring the payment of a 15 percent tax on profits by overseas gambling services providers to UK customers.
The Gibraltar Betting and Gaming Association (GBGA) argued that the tax charge discriminated against non-UK bookmakers and breached EU law.
However, the European Court of Justice said that due to the legal between the UK and Gibraltar (an overseas territory of the UK), a supply of services by a Gibraltar-based business to a UK consumer is equal to the supply of services within the same EU state, nullifying the Association's contention that EU rules on the freedom to provide services apply.
In its June 13 ruling, the Court ruled: "Article 355(3) of the Treaty on the Functioning of the European Union (TFEU), in conjunction with Article 56 TFEU, is to be interpreted as meaning that the provision of services by operators established in Gibraltar to persons established in the United Kingdom constitutes, as a matter of EU law, a situation confined in all respects within a single Member State."
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