Ukrainian committee approves 5% tax on sports betting

Ukrainian licensed sports betting operators are set to be taxed at 5% of GGR under proposals approved by the Verkhovna Rada Committee on Finance, Tax and Customs Policy.

Representatives of the committee agreed a split system of taxation for operators based on vertical, with a 10% tax rate on GGR being applied to online casino.

Under proposals greenlit by the committee, land-based slots operators would be taxed at the higher rate of 12.5% of GGR.

In all cases, operators would pay these taxes on a quarterly basis and would only be liable to do so once a jurisdiction-wide system of player monitoring goes live no later than two years after the regulation bill is adopted.

Prospective Ukrainian operators would also be subject to 18% corporation tax on profit but would not be subject to VAT on gambling services.

Ilya Machavariani, head of CIS gambling practice at international law firm Dentons, welcomed the news but sounded a note of caution over the preliminary nature of the taxes, claiming it would be “very optimistic” to claim they were set in stone.

“I understand that right now the level of debate with regard to the taxes is rather conceptual as the government is trying to decide what approach should be pursued: draw up something simple and adopt it now with a view to changing it later once the market has launched or creating a complex and balanced tax framework now and sacrifice existing market launch timelines,” Machavariani told EGR Compliance.

A separate bill dealing with the licensing and regulation of the market is currently working its way through the Verkhovna Rada having been passed for a second reading by the parliament earlier this month.