Exclusive: Regulator explains Spanish back-tax case

The general director of the Spain’s General Directorate for the Regulation of Gambling (DGOJ) has said that the back-tax case against a number of European operators is a “completely separate process” to the awarding of egaming licences, but that the regulator could be forced to deny companies licences based on the tax authority’s instructions ““ despite its lack of involvement in the case.

Enrique Alejo’s comments follow the news that a number of European operators are preparing to settle the claims brought for the payment of back-tax by the Spanish tax authority.

Speaking exclusively to eGaming Review, Alejo revealed that the decision to claim tax on egaming operations from the period beginning January 2009 and ending in May 2011 was “an independent case brought by the Spanish tax authority,” rather than one supported or initiated by the DGOJ.

The DGOJ’s involvement was rumoured due to Law 13/2011 in Spain’s egaming regulation, passed through the company’s parliament in May last year, which included the proviso that operators had to be “up to date on their tax and social security obgliations,” according to Cristina Romero de Alba of Loyra Abogados.

While Alejo stressed that the DGOJ had no involvement in the back-tax claims, he conceded that it would have to take direction from the tax authority over which companies had paid the tax, saying: “In the call for the licences that was made last November, and also in our legislation which was issued in May, one of the requirements which was to be compliant with all fiscal requirements of the Spanish authorities.

“Obviously if the tax authority tell us that one of the potential applicants for the licences is not compliant this will affect the process,” Alejo explained. He went on to say that ultimately there was “always the possibility” that government would decide to pursue the case.

Many have been surprised by the tax authority’s timing, bringing in the case just weeks before licences were expected to be awarded on 1 June. It follows a change of government and an overhaul of the DGOJ’s management team, with Alejo’s appointment as general director being followed by the resignation of deputy general director Juan Carlos Alfonso Rubio and deputy general director of gaming management Miguel Ordozgoiti ““ a move which saw the pair replaced by Carlos Hernandez Riera and Jaime Lorenzo respectively.

Alejo admitted that the change in government, which saw the centre-right El Partido Popular take control of the country, had led to a review of the regulatory process, resulting in the initial delay in opening the market by six months as well as the DGOJ management change.

“There has been a change in the fiscal authorities in Spain, and they have considered that there was a case against the companies operating in Spain from offshore, offering gambling and gaming services to customers in the market.

“Previously it was considered that there were no fiscal grounds or it simply had not been properly debated, the issue of the fiscal treatment of companies active in Spain, but now the government and tax authority have decided there was a case and that the operators have to retrospectively comply with the law,” he said.

While the DGOJ is not directly involved in the case, it is supplying information on the companies applying for the licence, as well as the actual applications, to the tax authority: “We have to be fair, obviously though this is not our issue the tax authority has all the information from our side, including who is applying and who is not applying but continues to be active in Spain.

“For the applicants it is more important to be active in the market rather than to fight the case, hence why they are paying the back-tax, and the unlicensed operators will be prosecuted by us. They [the tax authority] presented this to the companies which are now trying to resolve the issue voluntarily,” he said.