Portugal propose 25% tax on online gambling revenue

Business News

According to Negocios News, the Government intends to change taxation in online games, according to a draft version of the State Budget proposal for 2019, which Business had access to. Rate becomes fixed and changes the tax base on sports betting.

The government wants to change taxation in online games, according to a preliminary version – and may still be modified – of the proposal of the State Budget for 2019 (OE2019), to which the Business had access. The Special Online Gambling Tax (IEJO) will now have a flat rate of 25% and will focus on the gross revenue of operators in all segments.

In games of chance, the Government’s proposal is that the IEJO rate is based on the gross revenue of operators and is set at 25%. Currently the rate is already on gross revenue but varies between 15% and 30%, depending on the annual value of gross revenue.

In sports betting at odds, where the player bets a cash amount against the dealer based on a predefined quota, the changes are greater. Firstly, the rate will focus on gross revenue and not on betting value, a claim of the sector. In addition, the rate, which is currently 8 to 16%, will be 25%.

The same change is recorded in horse betting, with a flat rate of 25% on gross revenue. At this moment, the rate is 15 to 30% in the mutual horseracing bets and it affects the gross revenue of the operator, while in the equestrian betting quota IEJO is identical to the sports betting quota. There are still no licensed operators for horse betting in Portugal, and Santa Casa has indicated that it intends to move forward in this segment in the first quarter of 2019.

The gross revenue corresponds to the total value of the bets to which the amount of premiums distributed is written off.

In the first half of this year, the State settled 28.1 million euros with the IEJO, a year-on-year increase of 15%. Gross revenues from online gambling reached 70.2 million euros in the first six months of the year, which represents a 24% growth over the same period of 2017. In the total of 2017, the IEJO earned 54.3 million euros to the state coffers.