Top Five Tax Havens for UK Casinos
29 November, 2021
Many countries, including the United Kingdom, don't impose taxes on gamblers for their winnings. Instead, the government requires the casino operators to pay those taxes. Operators have to pay a 15% tax levy in the UK on their gambling and betting operations. This is a high percentage, especially when compared to other markets where taxation is as low as 1%.
While it's undeniable that casino operators make lots of money, the goal of any business is to increase its profits. Hence, we see UK gambling operators getting sneaky by using tax havens to their advantage. These are typically offshore destinations where the taxation is much lower than in the UK. Casino companies manage to save millions in tax money that should've gone to the British treasury by moving some operations there.
What Are Tax Havens and Why Casinos Use Them?
There's not only one definition of what tax havens are out there on the internet. However, simply put, those are countries that have low tax rates. Tax havens are territories that allow multinational individuals and firms to avoid the laws of their countries. UK casino companies use them to escape the massive tax rates required by the British gambling regulations.
With these tax havens, brands can easily set up their company in a country with decent tax rates and save tons of cash. Of course, all these shenanigans are done per the laws and regulations. So, these companies face no consequences for their actions that make them superior to competitors respecting the national guidelines and laws.
Gibraltar is a British Overseas Territory, a perfect destination for UK companies that want to abuse low tax rates. This country has a stable economy and is a famous tourist attraction spot. Gibraltar got the attention of businesses in 2011, when it levied a 10% corporate tax on all businesses, whether they are online or land-based. With this law, Gibraltar quickly became a low tax region. Incorporating a business here is also not a long process as it takes about only one week.
Isle of Man
Famous for being a low tax jurisdiction, Isle of Man is also one of the top-rated tax havens. The corporate tax here is 0% for practically all sorts of income, and companies pay a 20% top rate of income tax. The sole exceptions are bank and rental earnings from land and buildings on the territory, which are both taxed at 10%. There is also a tax cap arranged. Thus, an individual's maximum tax liability is GBP 120,000 or GBP 240,000 for a couple.
Even though it is the smallest country in Europe, Malta has always been a top region in gambling. This country is famous for being a low tax territory that operates within the European Union. It became a favorite for iGaming companies in 2004 when it introduced advantageous gambling regulations and taxation. Malta charges a fixed annual license fee of EUR 25,000, which may vary depending on the type of the license. There's also a 5% gaming tax applied on gaming revenue. Still, that's much better than the 15% tax imposed in the UK.
For many people, Curacao is the perfect vacation destination. For businesses, however, Curacao is a tax haven. The country doesn't impose any corporate tax rates, and it doesn't even tax gambling income from players based outside Curacao. This is a huge benefit for companies that target players outside the country. Only a 2% net profit tax is what businesses need to cover when they base their gambling operations in this charming country.
Other Countries With Lower Taxes
Besides the destinations we mentioned above, there are also other tax havens worth noting. For instance, we must mention Cyprus, Belarus, and Bulgaria. All of these countries are members of the European Union, which made things very favorable for UK companies. They have good regulations, stable economies, and yet low taxes. However, things may change now that the UK has left the EU. Until then, companies like bet365, Flutter, and William Hill will keep on saving billions of pounds by taking advantage of these countries' taxation rates.
When companies get a chance to save money and boost profits, they'll do it. The same applies to UK casinos that have found great partners in tax havens. While many people would think that tax havens are mysterious offshore destinations like Curacao or the Isle of Man, some of them are right there on European soil. These unfair practices save multi-billion corporations tons of cash that could've gone to support the UK's education, health, or infrastructure. As tax havens aren't a secret, it remains to be seen for how long will UK regulators let these operators work like this.
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