The Romanian National Office for Gambling (the “NOG”) has now clarified the computation basis for the recent 2% tax applicable to online gambling operators. As per Emergency Government Ordinance no. 114/2018 (“EGO 114”) adopted in late December 2018, starting with 1 January 2019, online gambling operators owe a new monthly tax of 2% of the “total participation tax cashed in monthly”. EGO 114 left it to the NOG to regulate secondary legislation clarifying the method of computation of the new tax.
Just ten days before the payment deadline for the new 2% tax, and without any prior market consultation, the NOG issued Order no. 38/2019 (the “Order”). The Order clarifies that the 2% applies to the total value of “participation taxes cashed in in the respective month”, which it defines as any transfer from a player’s bank or similar account into the gaming account held on the gaming platform. The tax must be calculated, declared and paid to the State budget by the 25th of the following month.
The definition of “participation tax cashed in” provided by the Order appears inconsistent with existing provisions, as Romanian gambling legislation already defines “participation tax” as that amount of money charged by the gambling operator from the players “in exchange for the right to participate in gambling”. The Order takes a more extensive approach, as it states that the 2% tax applies to all deposits made into the players’ gambling accounts, irrespective of whether they were effectively used in the game. According to the Order, deposits made in the players’ gambling accounts but not used in the game are still subject to the 2% tax, although such amounts are not effectively “cashed in” by the gambling operators.
The Order also changes the standard reporting template used by online gambling operators for the monthly declaration of online gambling revenues. Also, and somewhat inconspicuously, through a footnote at the end of the new template, the NOG has introduced a new reporting obligation for online gambling operators, which must now provide the NOG with proof of payment of any license tax, gambling authorisation tax, withholding tax on players’ gambling revenues and the new 2% tax paid in any given month, together with the monthly revenue statement (due by the 10th of each month). Online gambling operators should pay attention to the new reporting obligations, given that submitting proof of payment of the withholding tax on players’ gambling revenues to the NOG was not previously required.