Gambling in Ukraine is getting new tax framework
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Ukraine's Parliament passed the bill updating the tax framework for gambling and lotteries on 15 July 2021. After more than 10 years of ban, gambling was legalized in Ukraine in August 2020. However, industry's tax rules have not been updated. The bill aims to address this issue and liberalize current regulations.
The bill keeps the existing two-tier corporate income tax system for gabling/lottery operators. It includes a regular CIT at the rate of 18% and a special CIF at 10%. The GGR tax will be deductible from the regular one.
A CIT at 18% is the company's profits. A special tax is 10% of gross gaming revenue.
Gambling in Ukraine is getting new tax framework. GGRG will be calculated as follows: G GR = gross revenue from gambling minus winning payouts minus returned bets plus winnings/prizes remaining unclaimed as of 31 December of the reporting year. For lotteries, Ggr = revenue after formation of lottery pool plus portion of pool remaining untaxed as at 31 January of year, and GBR tax will come on quarterly basis.
For gambling, GGR is gross revenue from gambling minus winning payouts minus returned bets plus winnings/prizes remaining unclaimed as of 31 December of the reporting year. For lotteries, the G GR is revenue after formation of lottery pool plus portion of pool remaining untaxed as at 31 January of year, and GRA is the revenue collected from the pool.
The bill does not provide for any changes to VAT rules. The existing regulations will continue to apply. Most of the core operations within gambling/lotteries are VAT-exempt. Side activities of gambling operators are subject to general rules, such as providing food, drinks and entertaining gamblers.
Gambling in Ukraine is getting new tax framework. The bill proposes to fully exempt winnings/prizes with the value of up to eight minimum wages from individual income taxes. It also provides for 'anonymized' reporting. It suggests that the operator will not be required to disclose the names or tax IDs of the winners or the amount of winings/Prizes awarded to a particular gambler.
Gambling in Ukraine is getting new tax framework. The bill suggests repealing the provision of the Gambling Law that requires holders of online casino license, betting license and slot machines to pay triple amount of license charges until the implementation of a state-owned online monitoring system. Companies which have already paid such triple charges are proposed to credit the excessive amounts against their future annual charges. Before signing into law, the bill will undergo further parliamentary discussion and some rules may be changed in the second reading.
