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Hungary's Gambling Taxes Drive People Online

by Ulrika Lomas, Tax-News.com, Brussels

17 May 2010


Recent amendments to the Hungarian Gambling Act have put many local poker clubs out of business as a result of heavy-handed regulation and excessive taxes on poker winnings.

The new rules imposed a maximum limit on poker club profits at 15% of turnover in addition to a 30% tax on revenue.

Under the Gambling Act, the government is required to have majority ownership and control of gambling establishments, and it is unlikely to accept with alacrity that masses of poker players have moved over to playing online on a tax-free and unregulated basis.

With the newly elected conservative government under Fidesz coming to power for the first time in eight years, there is however suspicion that further measures will be introduced to tax and regulate gambling online. Erik Bánki, the Hungarian parliament's sports and tourism committee chairperson, has already expressed interest in the Danish and Norwegian measures to block unlicensed websites in an interview last February. However there is at present no licensing system for domestic online gambling websites in Hungary, the practice being banned at present.

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 | Hungary | interest | commerce | internet | e-commerce | gambling | regulation

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