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Irish Finance Bill Confirms Taxation of Online Operators

21 January 2011 by admin

Brian-LenihanToday the Irish government’s introduction of their finance bill confirmed the plan to extend taxation to include online betting operators. Though most in the online gambling community expected it to happen, and the government had announced its intention to do so, the unveiling of the bill made the plan concrete.

In December of last year, Minister for Finance Brian Lenihan announced in his budget plans that he would extend a 1% levy on betting turnover for online bookmakers. Previously, though that tax is required of all brick and mortar betting shops and race tracks physically located in Ireland, the online betting websites, such as Paddy Power and Boylesports, were exempt.

By publishing the finance bill today, Lenihan made good on his promise, or threat, depending on your point of view. According to Minister Lenihan and other proponents of the taxation, the policy will bring in approximately €20 million annually for Ireland. The land-based bookmakers think it only seems fair, since they already had to pay the 1% tax.

Opponents of the plan, however, warn that it would force the online bookmakers to move offshore. It seems unlikely that such a small increase, from nothing to 1%, would cause any companies to relocate, though.

Also included in the bill is a plan to tax overseas betting exchanges, such as Betfair, that cater to Irish customers, at 15% on the commission they receive from Irish betters. Though Betfair is located offshore and does not actually conduct any transactions, they would be taxed under what the government calls a “betting intermediary duty” because they host the transactions.

Minister Lenihan has also stated that he is open to the idea of setting up a licensing system for overseas betting websites that want to accept Irish betters. Anything in the finance bill that calls for a modification of existing betting laws would have to be passed in separate legislation that amends current law. The current betting laws were passed in 1931 in the Betting Act.

In addition to the betting-related changes, the finance bill would also change the day that income tax is due, give new powers to the Revenue Commissioners, allow citizens to pay their taxies with a credit card, allow the Revenue Commissioners to publish the names and sum owed of any tax defaulters, and more. The main purpose of the finance bill is to enact the policies laid out in the official budget.

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