What Taxes Do Gambling Operators Pay in Ukraine and Abroad? Several months ago, a number of Ukrainian media outlets reported that the Verkhovna Rada intends to give the gambling business a real “gift” in the form of the lowest taxes in Europe. One of the main arguments supporting this opinion was the comparison of the tax rates on GGR. This concerns the notorious draft law 2713-d, which has only passed its first reading.
What taxes do gambling operators actually pay? How will the situation change if the law is eventually passed? And how do foreign operators fare?
Read also: Spain: Lotteries Are Not a Children’s Game.
Taxes for the Gambling Business in Ukraine
The taxes that gambling operators pay in Ukraine are conditionally divided into three types.
The first is general taxes. This includes VAT or corporate income tax at a rate of 18%.
The second is taxes on winnings. Gambling establishments must pay 18% on individual income and a 1.5% military tax.
The third is “specific” taxes established solely for this type of business.
According to the head of the legal department at FAVBET, Vladyslav Kuvichkin, in addition to the standard corporate tax, military tax, and indirect taxes, the gambling business also pays two additional ones. The first is the tax on GGR and licensing fees, which are among the highest in Europe.
The rates on income for gambling operators in Ukraine vary: 10% for gaming halls, 18% for bookmakers and casinos, and 30% of income for lottery operators.
License Costs in Ukraine
The cost of a license for a land-based casino in Kyiv is €2.3 million per year; if the casino is in any other city, it is half that—€1.15 million per year.
Online casinos pay €260,000 annually for a license.
The license for bookmaker activities costs €1.15 million.
A permit for gaming machines costs €290,000, while a website for online poker costs €190,000.
Additionally, extra licenses are required for gaming tables: €6,500 for a table without roulette, €3,500 for one with roulette, €200 for each gaming machine, and €1,100 for a bookmaker’s table.
Since Ukraine’s online monitoring system has not yet started, all licensing fees have been tripled.
“Moreover, all incoming VAT from the funds we invested in repairs, equipment purchases, etc., we de facto cannot use, and it remains with the state. This is also an indirect contribution to the budget,” clarifies Andriy Yeferomov, director of the legal department at First.
What Draft Law 2713-d Proposes
The law, which proposes amendments to the tax code, outlines new rules.
These include the cancellation of triple licenses (what operators paid “in advance” should count toward future payments), taxation of winnings over 48,000 hryvnias, and the introduction of a 10% tax on GGR. The income tax rate of 18% remains.
Critics of the law protest against the 10% rate on GGR, citing examples from other countries. In Belgium, it is 11%; in Argentina, 15%; in Sweden, 18%; in Italy, 25%; in the Netherlands, 29%; in the UK, 50%; and in Denmark, 75%.
However, comparing the GGR tax without considering the cost of licenses is, to put it mildly, unprofessional.
License Costs in Other Countries
In Belarus, gambling operators pay an overall license fee of €5,300 per year. Casino owners in Estonia pay €51,200 per year, while in Romania it’s €11,000, in Sweden it’s €42,000 (for online casinos and bookmakers), and in Denmark, a combined license for casinos and betting costs about €59,000. In Latvia, the permit for all types of gambling costs €427,000; in Estonia, license costs range from €3,200 to €47,900; and in Italy, an operating license will cost €350,000. But all these amounts are significantly lower than the fees paid by Ukrainian gambling operators.
“If you look more closely, each country strikes its balance between the GGR tax rate and license payments. If a government implements a high level of license fees, the GGR tax decreases and vice versa. For example, in Spain, the GGR rate is 20%, while the license fee is €50,000. In Ukraine, there is a complete imbalance. We have some of the highest license fees and at the same time, a relatively high GGR rate,” notes Vladyslav Kuvichkin, head of the legal department at FAVBET.
In this regard, the adoption of draft law 2713-d is simply necessary. Gambling operators are confident that this bill will balance the rules of the game, make them relevant, and the market will become clear and transparent, which will generate significant interest from international partners. Did you find the news interesting and informative? Want more of the best gambling news and stay updated on the events? Subscribe to our ‘Gambling News’ section and receive notifications about fresh publications. If you found this publication helpful and interesting, we recommend subscribing to our breaking gambling news to receive notifications about the latest updates and stay informed about current events.
