Betting Duty Regulations update
The Irish Revenue Commissioners have published the Betting Duty and Betting Intermediary Duty (Amendment) Regulations 2020 (the Regulations), offering relief to bookmakers from the 2% betting duty levied on every bet entered into with persons in the State.
The relief applies to bookmakers that hold an Irish bookmaker, remote bookmaker or remote betting intermediary's licence. In the case of larger bookmakers that operate within a corporate group, the group is considered a "single undertaking" and is only entitled to claim the relief once across all group entities.
Relief under the Regulations is capped at €50,000 across a 12-month accounting period. The relief cannot be carried forward into later accounting periods where all or part of it has not been claimed in that earlier period.
The relief is considered de minimis aid for the purpose of EU State Aid rules and does not need to be notified to, or cleared by, the European Commission.
The Regulations also specify certain additional information that must be included in bookmakers' returns and record keeping requirements on the relief claimed.
The Regulations took effect on 14 January 2020. While the aim is to provide meaningful financial support to smaller independent bookmakers, the relief is available to all bookmakers regardless of the size of their businesses.
The Finance Act 2002 (as amended) provides that betting duty applies on every bet made, laid or otherwise entered into by bookmakers with persons in the State. Betting duty is a turnover based tax, charged on the amount of the bet placed by customers in the State. In Budget 2019, Minister for Finance Paschal Donohoe doubled the rate of betting duty from 1% to 2%. The betting sector representative body, the Irish Bookmakers Association, claimed that this rate increase was leading to shop closures and job losses and was proving particularly damaging to small independent bookmakers.
In the Budget 2020 Tax Strategy Group Paper published on 17 July 2019, the Department of Finance considered alternative models of betting duty. This included proposals to levy the tax on gross profits rather than turnover. There was also a de minimis proposal whereby a certain level of turnover would be discounted for the purpose of calculating betting duty liability. Ultimately, neither proposal was adopted.
In the Budget 2020 Tax Policy Changes, the government announced the introduction of a relief from betting duty and betting intermediary duty of up to €50,000 per calendar year aimed at supporting small independent betting firms. The Regulations give effect to this relief and stipulate additional requirements for bookmakers' returns and record-keeping duties, when claiming the relief.
Scope of the relief
The relief applies to bookmakers that hold a bookmaker, remote bookmaker or remote betting intermediary's licence under the Betting Act 1931 (as amended). For larger bookmakers that operate within a corporate group scenario (i.e. where one entity controls another, or a number of other entities), the bookmaker entities are treated as a "single undertaking" (as defined in Commission Regulation (EU) No.1407/2013 (the De Minimis Aid Regulation)) and can only avail of the relief once across all grouped entities.
The relief is capped at €50,000 across an accounting period for a calendar year. It is reduced proportionately where the bookmaker is not in business for a full calendar year or where the accounting period is less than 12 months. If bookmakers do not claim all or part of the relief, they are not permitted to carry the relief forward to later accounting periods.
The relief falls under the EU's De Minimis Aid Regulation regime. It can therefore be awarded by the State without notification to, or clearance by, the European Commission.
Reporting and record-keeping
The Regulations amend the Betting Duty and Betting Intermediary Duty Regulations 2015 by providing that bookmakers must include the following details in their return of betting duty:
- the amount of relief claimed for the accounting period in question
- the amount of aid received during the previous two calendar years and the current calendar year
- whether the conditions in the De Minimis Aid Regulation are satisfied, such that no state aid notification requirement is necessary.
In addition, bookmakers must retain records of all relief claimed and aid received in each accounting period for a period of ten years from the date on which relief was claimed.
If you think you may qualify for the relief and require more information please contact any member of A&L Goodbody's Betting, Gaming & Licensing team.
Date published: 27 February 2020