Spain's iGaming tax reduction comes into effect

The Spanish Parliament has approved the 2018 Budget, giving the green light to significant tax reductions for iGaming companies.

A five per cent reduction in online gambling tax for licensed operators has come into force in the country on July 1st. This applies to all betting exchanges, fixed-odds betting and horse racing licensed by national regulator Dirección General de Ordenación del Juego (DGOJ).

The tax cut is designed to encourage more gaming operators to enter the regulated Spanish market and discourage illegal gambling activity.

This sees the current 25 per cent tax rate on online casino, poker and bingo reduced to 20 per cent, while pari-mutuel sports betting will see a 3 per cent reduction in tax to 22 per cent of gross revenue.

The Spanish government has also delivered on its promise to slash taxes in the autonomous cities of Ceuta and Melilla, enabling them to better compete with the neighbouring British jurisdiction of Gibraltar. The budget includes a 50 per cent rebate for gambling operators who opt to base their businesses in the autonomous cities, cutting the GGR tax rate to 10 per cent.

In May, Ceuta deputy Juan Bravo, who helped drive the tax reductions in the Spanish parliament, told Gaming Intelligence that online operators from Gibraltar and elsewhere had already contacted the Ceuta government regarding the changing tax rate.

"Our intention is not only to host online gaming companies leaving Gibraltar because of Brexit, but also compete with Malta as a potential hub of iGaming," he said.

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