It has been well known for a long time that corporation tax is a complicated topic when it comes to online gambling operations. When people are searching for online sports betting jobs, it is popular to move abroad to tax havens like Malta or Gibraltar. What we would like to discuss, is how this tax is actually affecting the industry. What has made it so popular for the companies to relocate? Why are individuals following the online sports betting jobs abroad?
Find out more on this topic by reading on.
High Tax In The UK
One of the main reasons for online gambling operators moving their taxable operations abroad is the UK’s levies. At the moment, corporation tax in the UK stands at 20%. On top of this, there is a 15% tax on revenues at the point of consumption specifically for the online gambling industry. The different levies add up. As a result, companies find ways of avoiding all or part of the taxation by running their businesses remotely from around the world.
Relocating For Online Sports Betting Jobs
Due to the taxation mentioned above, most online sports betting jobs have been relocated to places like Malta, Gibraltar and Costa Rica. These places have levies for the companies that are far lower. In Gibraltar, the tax for these companies stands at 10% which is already much lower. In 2010, they online charged 1% per annum, which was capped at £425,000. In Malta, with a sports betting license, the tax is reduced to as little as 0.5%. This is capped at €466,000. When you look at this in comparison to the UK it is not hard to see why companies relocate their jobs abroad.
EU Push For Tax Regulation
However, this ‘loophole’ in corporation tax for online gambling companies may not last forever. The European Union is attempting to bring member states in line with their own stricter online gambling regulations. It will be interesting to see how this plays out between countries following the controversial Brexit execution. The UK looks like it will plain to further raise restrictions on online gambling sites. However, this may result in a reduction in the number of services provided to the UK. Companies will have to balance up which they value more. The taxable profits or the consumer base.
For countries like Malta where online sports betting jobs and services make up 12% of all goods and services sold in the country, stronger restrictions could actually damage their economy.