Gambling business tax in Ukraine: casino accounting, tax rates
Organization of gambling business is a new type of activity, which is being actively discussed today in connection with the adoption of a new law governing the Gambling Licenses.
At the time of writing, the legislation in this area is still being got in order - for a full start of business there should be developed individual requirements for each type of the Gambling License. But many businessmen are already beginning to prepare to enter the market as soon as possible.
Our lawyers are already preparing to develop document templates for obtaining a Casino License. But today we wanted to discuss such a burning issue as taxation of a casino or other gambling business. What to expect and what tax rates to expect?
Which taxation system is better to choose for a casino?
When registering a company, you must choose the tax system, although in the case of gambling business you don’t have many options. Only the general taxation system will be suitable for gambling business in Ukraine. The Tax Code of Ukraine has clear restrictions on the use of a single tax when conducting activities related to the organization of gambling, lotteries, betting and games of chance and betting.
What taxes will have to be paid under the general taxation system?
- The general system implies the accrual and payment of income tax at 18% of the received income minus expenses, i.e., on “dirty” income.
Income generated from turnover is all that a company will earn - in the case of the gaming business, will receive (from bets, sale of lottery or tokens).
Expenses are all that is necessary for the company to receive income - premises, wages, payments for the winnings and other expenses of activity. Income tax is paid on the difference between income and expenses. If the expenses exceed this amount, no tax is paid, but in this case there is no point in operating without profit.
- Companies using the general taxation system are obliged to be VAT payers under certain conditions, for example, if the turnover exceeds UAH 1 million per year.
However, the Tax Code of Ukraine contains a clause exempting from this tax for the purchase of chips and payment for participation in gambling. That is, the casino does not charge VAT on the sale of chips to players. Payment of winnings is also not subject to this tax. At the moment, in most cases, when playing games, VAT will not be charged or paid. However, the legislation may well change after the final adoption of all the rules governing the gambling business.
Our company offers its Clients not only assistance in obtaining any licenses, including, for example, for the sale of alcohol, but also tax advice, which will help to avoid problems with tax authorities in the future.
What other taxes shall be paid by the casino?
Regardless of the type of activity, one should not forget about taxes on wages, local taxes and fees.
Separately, it is necessary to mention the need to use cash registers, which are mandatory when receiving income in cash at the cash desk of the company using the general taxation system. A cash register shall be registered with the tax authorities before carrying out activities using cash.
Tax on casino winnings: how will it work?
Many people are interested in the question of how to tax the winnings gained from playing games? There is no final answer to this question yet.
To date, cash or non-cash winnings in the amount of more than 25% of the minimum wage (up to September it is UAH 1,180.75, from September - UAH 1,250) are subject to income tax (18%) and military fee (1.5%). Responsible for the calculation and payment of taxes is the tax agent, business entity making the payment - that is, the casino / gambling establishment.
If you are thinking about starting a gambling business in Ukraine, don’t hesitate to call us. Our lawyers will prepare all the documents for obtaining a license and help to make head of the organization of activities within the law.
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