Many of the online gambling sites I visit have their headquarters in Gibralter, a U.K. territory, but that may all change because the government has announced that it will be drastically inflating its taxes on all online gambling firms starting in January.
This is a decision that could prove costly for several online poker sites.
Especially ones I like a lot.
Online gambling companies are currently paying just a 1% tax in Gibraltar, with a ceiling of £425,000, but starting next month, they’ll be forced into the same 10% tax rate as other Gibraltar businesses pay.
Look some of my favorites based in Gibralter are Party Poker and 888poker.
The argument is it is costing the British government a lot of tax money and we all know the economic reality in the U.K.
Gibraltar’s first minister, Peter Caruana, said the tax increase has been called for by Gibraltar government’s decision to conform to European law.
“To comply with EU law, we must phase out the tax exempt company in 2010,” Caruana said. “However, in order to sustain our successful economic model, we must retain a commitment to a very competitive corporate tax model.”
Party Gaming said in a statement that it would keep its headquarters in Gibraltar. We’ll see if they stay, now.
According to a report in The Guardian newspaper, while online companies will now pay the standard 10% tax rate paid by other businesses, they will still not be subjected to any value added tax (VAT), meaning that Gibraltar will remain a good setting for gambling companies.
Online gambling has proven to be an extremely important source of revenue for Gibraltar and it is believed that 2,000 people currently work in the sector, which is around 12% of the island’s workforce.