Finance Committee in Ukraine Changes Gambling Tax Rates

Bill 2713-d, introduced in Ukraine last year in August proposed different taxes on gambling based on the type of gambling activity. The proposal was changed last week when the Committee on Finance, Tax and Customs Policy approved a flat tax of 10% applicable for all gambling activities.

Ukraine Changes Proposal for Gross Gaming Taxes on Gambling Activities

The Parliamentary Committee on Finance, Tax and Customs Policy in Ukraine approved changes to a bill that proposes the tax rate for gambling in the country. Bill 2713-d was initially put forward last year in August by Oleg Marusyak, chair of the Committee.

The initial version of the bill proposed different gross gaming (GGR) taxes based on the type of gambling activity. For example, the bill proposed a 5% GGR tax for bookmaking. On the other hand, under the proposal, online gambling would be taxed at 10%, while the tax for slot machines would be 12.5%.

However, last week, the Committee decided to change the proposed tax rates. The change sets a flat 10% GGR tax for all gambling activity types. Furthermore, the Committee introduced an 18% corporate tax rate applicable for the operators.

Tax on Winnings and Decreased License Fees

Another change which the Committee introduced is a tax on winnings. Any player that wins more than eight months’ minimum wage, which is UAH 48,000 ($1,700) will be subject to that tax. In other words, this means that players who win such amounts would need to be aware that their winnings are subject to tax.

Initially, the bill proposed sports betting operators pay triple the license fee cost while an online system for protection is being developed. However, last week, this proposal was abolished. Under the initial version of the bill, a similar triple license fee was proposed for operators who would like to offer online casino services. However, the committee decided to abolish that requirement too.

The Bill Seeks Review from the Verkhovna Rada

Passing the Committee last week, now the bill is heading to the Verkhovna Rada, which is the Ukrainian Parliament. The proposal would then undergo further review and possibly amendments. After that, the final draft of the proposal would need to be signed by President Volodymyr Zelensky.

Although taxation is yet to be established, the Ukrainian Commission for the Regulation of Gambling and Lotteries (KRAIL) already approved a license last month. Spaceiks LLC was the first online gambling operator to secure a license in Ukraine. Although the operator’s three other attempts were rejected, this time KRAIL gave the green light.

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