In the ongoing gambling tax case between Gibraltar and the UK's tax authority, advocate general and senior EU lawyer, Maciej Szpuar, has given evidence to the European Court of Justice - which is the highest court in the European Union - that when it comes to online gaming, Gibraltar should be treated as a single entity with the UK in regard to its freedom to provide services.
The Gibraltar Betting and Gambling Association (GBGA) has been attempting to challenge the UK's 2014 gambling tax regime, which officially came into effect at the start of 2015. The gambling act requires operators with access to the UK market to be licensed and regulated within the UK as well as pay 15% duty on all online gambling profits generated in the United Kingdom.
Prior to the implementation of this tax, gambling operators were licensed and taxed based on a series of jurisdictions that the UK government had "whitelisted". Gibraltar was one of these jurisdictions.
The GBGA argues that this tax regime's "point of consumption tax" is in opposition against Article 56, which establishes the right to offer services across borders. However, Szpuar says that the application of UK gambling levy to Gibraltar operators should be considered a "purely internal situation." In other words, it would not engage Article 56.
The lawyer's opinion was a significant disappointment to the GBGA. The reason is that while the opinion of Szpuar is not binding on the English High Court or the European Court of Justice, the courts often follow the opinion of the advocate general.
"We continue to believe that the gambling duty applied by the UK government to operators out of the jurisdiction, in circumstances where the customer may not be in the UK when they gamble or even a UK resident, is a disproportionate restriction on operators," stated GBGA CEO, Peter Howitt.