Romania orders operators to apply new tax bands on player winnings

Romanian gambling operators face a period of tough regulatory adjustment, as the government has approved a significant tax increase on player winnings to be applied by Romania’s Fiscal Code. 

Ratified by Parliament, from 1 August all licensed Romanian operators (land-based and online) must apply a new ‘withholding tax structure’ on player winnings across all gambling verticals.

The government had proposed amending the Fiscal Code’s betting taxes on 15 July to increase the tax contribution from Romania’s gambling sector.

Announced in the government’s latest gazette, all ONJN-licensed gambling operators must apply a new tiered structure on withholding player winnings.

The new withholdings tax will begin at 3% for winnings below RON 10,000 (€2000) – a tier that is followed by a 20% charge for winnings between RON 10,000-to-66,750 (€13,600).

Meanwhile, the top tier will see player winnings above RON 66,750 will be taxed at 40%.

Since 2016, Romania had applied the tax band of  1% on player winnings below RON 66,750, followed by a 16% tax on winnings between RON 66,750 – 445,000 (€110,000) – winnings above RON 445,000, were taxed at 25%.

Further measures will see gambling regulator ONJN apply a new fee structure for licenses renewals, doubling its current fee from €120,000 to €320,000.

AOJND – Romania’s Remote Gambling Trade Association has urged the government to implement a standstill period on the tax changes – in order for tax alternatives to be discussed with licensed operators.

The trade association stated that the new tax bands represented a penalty on recreational players as market data revealed that 80% of player winnings were below RON 1,000 (€200).

Furthermore, AOJND warned ministers that changes to the Fiscal Code on player winnings, would severely threaten Romania’s 90% channeling rate of players to licensed and taxed operators.