Romania to go ahead with tax hike on gambling winnings

The tax hike will go ahead but at a lower rate than initially proposed. Land-based and online gambling operators will have to apply the new rates from August 1.

Romania.- The Romanian parliament has ratified a new rule in the country’s Fiscal Code that will impose a big increase in the tax charged withdrawals of gambling winnings. All licensed Romanian operators, both land-based and online, will have to apply a new tiered withholding tax structure on winnings across all verticals from August 1.

Gambling operators licensed by the national regulator ONJN will have to apply a withholding tax of 3 per cent on winnings of under RON 10,000 (€2,000) 20 per cent on winnings of between RON 10,000 and 66,750 (€13,600), and 40 per cent on any winnings higher than that.

That compares to the current rate of 1 per cent on player winnings below RON 66,750, 16 per tax on winnings between RON 66,750 and 445,000 (€110,000) and 25 per cent on winnings over RON 445,000. It does, however represent a concession on the original hikes proposed, which would have seen 10 per cent charged on winnings of under RON 3,000.

Meanwhile, operators will also face heftier fees for licence renewals. The ONJN will more than double its current fee from €120,000 to €320,000.

The government intends the changes to raise the tax contribution from Romania’s gambling sector, although operators have argued that the change could have the opposite effect if it drives players away from licensed operators.

The Romanian Remote Gambling Trade Association AOJND has called on the government to hold the changes to allow time to discuss possible alternatives with operators. It warns that the change would severely threaten Romania’s 90 per cent channelisation rate of players to licensed operators.

It also claims that the new tax bands constitute a penalty on recreational players with low winnings since 80 per cent of winnings were below RON 1,000 (€200).

AOJND president Odeta Nestor said: “Before adopting such a fiscal measure, a number of factors must be taken into account. Firstly, online gambling is primarily entertainment, not a source of revenue for players.”

He added: “Basically, we are mostly talking about cases in which the player does not pursue the win at any cost but the pleasure of competing. In this way, online gambling is a source of reducing daily stress.

“I have often emphasised that Romania is a success story in terms of gambling legislation. But this situation depends on the ability of the authorities to maintain an attractive legislative and fiscal framework.”

In March, Romania’s National Gambling Office ONJN blocked another 26 unlicensed gambling sites. The Romanian regulator has been regularly updating its list of blocked sites since it began in 2015 ahead of the introduction of regulated igaming.

The latest list of blocking orders featured Sloty.com and a1xSlot.

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