Three organizers of games of chance, who have been calculating and collecting tax on winnings from players since the start of the implementation of the new Income Tax Law, announced in a letter from their lawyer to the Tax Administration that they could stop collecting taxes if the tax authorities do not force other organizers to apply the law and if they do not ensure that the law applies equally to everyone.
The amendment to the Personal Income Tax Law, which introduces a new method of calculating tax on winnings in betting and lottery games of chance, came into force on January 1. There is no tax on winnings up to 50 euros, the tax on the portion from 50 to 1.500 euros is 10 percent, and the tax on amounts over 1.500 euros is 15 percent.
However, only three organizers, Volcano, Admiral and Lob, have been implementing the law from the beginning and deducting the tax from players' winnings. Of the remaining 35 organizers, four more have started doing so in the meantime, but the remaining 31 have not been calculating the tax from players for 15 days. Some of these organizers have been advertising in recent days that the tax is unconstitutional and that they are taking it on themselves. The Ministry of Finance has announced that this tax collection is not possible and is illegal.
The legal representative of Volcan, Admiral and Lobo requests a meeting with the director of the Tax Administration in the letter, and recalls previous letters from these organizers requesting a reaction from the tax authorities to the violation of the law.
"You are aware of the indisputable factual situation that certain taxpayers, who have been clearly identified by you, do not apply the Personal Income Tax Law in the manner prescribed by law and do not fulfill their obligations in the manner prescribed by the Law, but quite the opposite, even publicly promoting in the media this behavior that is in absolute contradiction with the norms of the Law. My authorities remain firmly of the view that the Personal Income Tax Law should and must be applied in such a way that each norm of the Law is applied immediately and without exception after the fulfillment of the factual conditions regulated by the Law for the application of that norm, and that all taxpayers must be obliged to strictly apply the norms of the Law in the manner prescribed by the Law itself, and additionally confirmed by the expert interpretation of the administrative bodies that you manage," it was stated in a new letter sent to the Director of the Tax Administration.
The letter again points out that there cannot and must not be any exceptions or derogations in the application of the imperative norms of the Personal Income Tax Law in the part that refers to the normative regulation of taxes on winnings from lottery and betting games.
"The role and duty of administrative bodies is to undertake all legal actions within their authority in order to enable the application of the Law without exception and exemption, and in particular to ensure that all those obliged to apply the Law, who are trying or already avoiding the application of the norms of the Law, "accept the more familiar rights" and thus protect the principle of legality and equality before the law of all subjects of law who are obliged to apply the Law, as well as to sanction all violations of the Law in the previous period.
For the above reason, my authorities consider it urgent that the competent administrative authorities promptly implement all legally prescribed actions and means for the purpose of strictly implementing the Personal Income Tax Law as a general act that has abstract legal content and therefore must have 'erga omnes' application, because in the event that the current situation persists and that certain parties obliged to apply the Law continue to be exempted from mandatory application, the ultimate consequence may be that other parties obliged to apply the Law, who are now acting strictly in accordance with the Law, including my authorities, will abandon its application, and this unwillingly because this is not their 'modus operandi', which would have a huge negative effect on this area of social and economic activity," the letter to the Tax Administration stated.
Due to this situation, they propose that the meeting be held today and that all controversial issues be discussed in direct communication, as well as to "jointly define actions and steps to remove obstacles in business regarding the application of the Personal Income Tax Law due to conscious and intentional violation of the norms of the Law by individual taxpayers."
Lawsuit against the state for compensation
Organizers of games of chance that began deducting taxes on winnings from their players on January 1st have suffered significant financial damage because a large portion of their players have switched to competitors that do not apply the law.
According to unofficial information from "Vijesti", the injured organizers will seek compensation from the state for the damage suffered through reduced income due to the failure to provide equal conditions for organizing games of chance and economic activity.
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