The European Betting and Gaming Association (EGBA) has disclosed its formal complaint submitted to the European Commission (EC) in relation to the German Bundesrat (federal council) proposing to set a 5.3% tax on online poker and slots stakes.
The Brussels-based trade association had previously warned the Bundesrat to terminate its proposed tax charge, which has been deemed to be non-compliant with EU’s business laws on state aid rules.
As it stands, Germany’s Bundesländer (state governments) have until 7 June to approve the controversial tax charge to be passed as a federal condition of Germany’s Fourth Interstate Treaty on Gambling (GlüNeuRStV).
The EGBA maintains its previous warning to the Bundesrat that it would pursue all avenues to terminate the ‘differentiated tax treatment’, which will establish an ‘substantial and unfair’ tax advantage to Germany’s land-based gambling establishments.
“We have previously made our concerns about the tax proposal known to the German authorities but to no avail and they will now need to justify the measure under EU law,” remarked EGBA Secretary General Maarten Haijer.
Germany’s Länder are required to settle on the final tax scheme of the GlüNeuRStV, which aims to launch Germany’s new federal gambling regime on 1 July.
An EC probe has been ordered for the Bundesrat to clarify how its tax charge differs from a state aid action that is prohibited under the European Union’s business frameworks.
The EC complaint is supported by German online gambling trade associations DSWV (sports betting) and DOCV (online casino).
“We appreciate the efforts made in recent years towards introducing a new online gambling regulation in the country and recognise that an appropriate tax will need to be paid by online gambling operators, ” added Haijer.
“However, the rate of the proposed tax is punitively high and will distort market competition and directly benefit Germany’s land-based gambling establishments over their online counterparts. We call on German politicians to rethink the proposed tax rate and bring it closer in line with the tax rate applied to online casino products in other EU countries.”