French senate votes to end stringent turnover tax

French senate votes on turnover tax
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France’s senate have agreed to do away with the highly controversial tax on turnover – in place of the more normative gross gaming revenues levy.

 

While a progressive shift, and one universally sought after by the industry and regulator ARJEL, the revenues tax rates that will take its place remain uncompetitively high by European standards. Horse racing betting will be taxed at 19.9 percent; sports betting at 33.8 percent and; online poker at 36.7 percent.

However these already high rates do not account for social security levies added to each vertical which bring racing and poker liabilities to around 40 percent and sports betting to over 50 percent.

“In recent years, several reports have highlighted the binding effect of the levy on players’ stakes and not on GGR,” the Senate explained. “ARJEL thus notes, in its 2015-2016 activity report, that ‘the tax on stakes is too burdensome, and prevents the balanced development of this market.”

The Senate added that the old system taxed players on “sums which they do not receive”. Conversely a revenue tax means that tax bills will change with players’ success or failure – meaning both operators and the state treasury will “share the luck”.

“The report of the Court of Auditors of October 2016 on the evaluation of the regulation of the games confirmed that the French taxation was heavy because of this choice of base on the bets, especially as the rates are high,” said senators.

“The report believes that it would be questionable to continue to use as a base the bets that only pass through the operator, rather than being held as revenue. Thus, ARJEL and the Court of Auditors propose to change the tax base to GGR.”


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