Market leading insight for tax experts
View online issue

Gibraltar loses appeal on UK gambling tax

printer Mail

The Court of Justice has ruled against Gibraltar’s appeal to have it exempted from the UK’s 15% gambling tax, following a reference from the High Court in R (on the application of the Gibraltar Betting and Gaming Association Ltd) v Revenue and Customs Commissioners and others [2016] STC 151. The new remote gaming duty rules, introduced from December 2014, apply on a ‘place of consumption’ basis. Under the previous rules based on the ‘place of supply’ principle, only service providers established in the UK were charged gambling duties on their gross profits.

The Court of Justice was asked whether, for the purposes of the freedom to provide services, Gibraltar and the UK are to be treated as if they were part of a single member state. Although the court confirmed that Gibraltar does not form part of the UK, it found that Gibraltar is a European territory and that the UK is responsible for its external relations, so that EU law is applicable to that territory.

The Court of Justice concluded that, as a matter of EU law, the provision of services by operators established in Gibraltar to persons established in the UK ‘constitutes a situation confined in all respects within a single member state’. See

Richard Asquith, VP of global indirect tax at tax services firm Avalara, said: ‘This ruling is a blow for Gibraltar’s burgeoning gambling market, and will add further uncertainties to the rock’s economic model with Brexit looming. 

‘At stake for Gibraltar on Brexit is its potential exit from the EU single market, which has enabled the low corporate tax outpost to attract the gambling, banking and insurance industries on the basis that they can then freely sell across the EU.’

Issue: 1358
Categories: News , Indirect taxes , VAT