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The Internet gambling haven of Gibraltar, long known as a tax haven, has decided to raise tax levies. Beginning in 2011, it will impose a standard 10 percent tax.
In recent years, Gibraltar has only charged a 1 percent tax duty with a maximum charge of €500,000 (£425,000) a year.
Companies that recently left the United Kingdom for more attractive tax rates in the British territory will likely be unaffected. William Hill made the move this year but is already believed to be paying the 10 percent tax. Businesses that have existed on the island for a longer period of time, such as Victor Chandler, will need to adapt.
John Shepherd, a spokesman for Gibraltar-based betting firm Partygaming, told the Telegraph that although the new rate would mean a large jump in tax for some companies, he did not think it would stop companies from setting up offshore operations in Gibraltar. “We’ve known about this for some time, and we’ve factored it in," he said. "The tax is still going to be very low.”
After moving its telephone-based business to Gibraltar over the summer, Ralph Topping, Chief Executive of William Hill, commented: “This significant change to our Telephone business is a response to the challenge of competing with betting exchanges and offshore telebetting operators, all of whom have benefited from significant cost and tax advantages over UK bookmakers. This has made it impossible for our existing business to compete profitably from the UK.”
William Hill expected to save between £4 and £7 million each year in costs by moving to Gibraltar. Last year, the firm paid £265 million in UK taxes and levies.
- Aaron Goldstein, Gambling911.com
