Workers in betting shops, casinos, automatic clubs and other forms of games of chance have become authorized persons who will have the right and obligation to ask players who win for personal documents, to identify them and to prepare a tax return for them, i.e. to determine the amount of tax due to pay.
This was stated in the changes to the Personal Income Tax Act and the subsequent amendments that were adopted last week, the application of which starts on January 1 of the following year.
Amendments to the law introduced the payment of a 15 percent tax on the difference between the payment of stakes and the payment of winnings in all games of chance, and subsequently the amendment defined that this applies to winnings over 300 euros.
The position of the law that imposes tax calculation as an obligation on the organizer and was also subsequently changed in the final version that was adopted reads "The tax on income from games of chance is calculated and suspended by the organizer of games of chance for each win and is paid simultaneously with the payment of the winnings".
In the basic proposal for amendments to the law, it was stipulated that the organizer pays the amount of tax to the Tax Administration the day after the winnings are realized, which left the possibility of control through the organizer's online supervision, and a subsequent amendment defined that the money is forwarded at the same time as the winnings are paid to the player.
"With this amendment, a change is made in paragraph 1 of the proposed article 50f, in such a way that the tax on income from games of chance is paid simultaneously with the payment of the winnings, so that the identification of the players of the games of chance can be carried out during the payment of the winnings and to create the conditions for further improvement and coordination in this area", it was stated in the explanation.
Thus, the law authorizes the employees of the organizers of games of chance to identify the winner, take his personal data, determine his stake and the amount of the winnings, calculate the tax on the difference and draw up some form of tax solution as a basis for the player to be able to reduce the winnings, and then through some the upgraded information system simultaneously transfers that money to the account of the Tax Administration.
The law on the identity card states that: "A citizen who has reached the age of 18 is obliged to have an identity card with him and, at the request of a person authorized to determine identity, to present it for inspection in the cases and under the conditions prescribed by law".
During the public debate on the initial version of this law, the organizers of games of chance complained about the intention to introduce this tax, stating that it is not applied anywhere and that it will cause players to move into the gray zone, but also about the proposal that they, that is, their employees , play tricks on tax officials who calculate and deduct tax. They also asked for additional deadlines in order to "adjust their technological solutions that depend on the decision regarding the method of payment of the on-account part of this tax".
The Ministry of Finance did not accept the proposal, stating that by analyzing the comparative practice and efficiency of the application of the law, they determined that tax collection will be more efficient if it is done by the organizer.
"In this way, efficient collection of tax revenues will be ensured, but winners from games of chance will also be protected in such a way that they do not have the obligation to submit a tax return", it was stated in the response of the Ministry in the report from the public hearing.
To the request to postpone the application deadline so that the organizers could change their information systems and adapt to the taxation of the players, the Ministry replied that for this reason they propose that the application of the law starts from January 1, 2025.
The Group of Gaming Organizers at the Chamber of Commerce previously stated that the application of the new law creates additional costs for them due to significant investments in infrastructure for supervision, control and collection, as well as that the proposal is contrary to the constitutional principle of freedom of entrepreneurship and the principles of a market economy.
"Because it transfers the collection of this tax, which is borne by a natural person, to the companies that make the payment, that is, to the organizers of games of chance. Namely, the state imposes an obligation on a business entity whose income is definitely reduced to do its work, to its own detriment", this group stated at the time.
In the explanation of the proposal for the introduction of this tax, the government stated that it expects a total budget income of five million euros, but that was before the government's amendment to exempt profits up to 300 euros from the tax.
Organizers are waiting for by-laws
In order for the law to be applied, the Ministry of Finance needs to pass by-laws by January 1, which will define the method of taxation, the form of a decision or certificate on the calculated tax, the method of payment, control and everything else that is not defined by the law itself.
This was exactly the problem when the Assembly in 2014, on the proposal of a group of DPS deputies, adopted a similar proposal on the introduction of a tax on winnings in games of chance, which should have been applied from January 1, 2015. However, the Ministry of Finance at that time did not make by-laws that would define the method of calculating this tax.
Since there were no by-laws, the organizers of games of chance in 2015 did not deduct this tax from their players, who had winnings. In December 2015, the Assembly adopted an amendment to the law which removes the tax on winnings from games of chance.
In their appeals during the public hearing, the organizers particularly pointed out that in casinos it is impossible to determine how much a player's total payment was because during his stay in the casino he can make several consecutive payments in order to achieve a profit over a period of time.
They also stated that no tax is charged on casino winnings in such a way in any country, which is why these organizers are burdened with larger concessions in order to spare their guests.
"Therefore, a big technical problem arises, how to calculate the total amount of invested funds. The impossibility of adequate calculation occurs due to the lack of a clear definition of what is considered a stake and for which period the tax on realized profits is calculated (temporary allocation of costs/stakes)", according to this PKCG Group.
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