Czech Rep nets €22m on tax revision of Gambling licences

Finanční Správa, the Financial Administration of the Czech Republic, has uncovered extensive tax evasion by gambling-related businesses, preventing losses of over CZK 540m (approximately €22m) to public budgets.

The Administration serves as the Czech government’s agency for tax enforcement and the prevention of tax evasion. Among its duties, Finanční Správa is responsible for conducting specialised tax audits in high-risk sectors such as banking, insurance, and gambling.

Last week, Finanční Správa announced that it had completed a tax audit of Czech gambling licenses for the period 2021–2022.

The investigation resulted in an additional tax assessment of CZK 340m (€14m), along with further financial obligations due to misreported fees and commissions.

These liabilities were uncovered through Finanční Správa’s use of new gaming data analysis, which identified suspicious financial flows and irregular player behavior in casinos.

Since 2023, the Chamber of Deputies of the Czech Republic has introduced amendments to the Czech Gambling Act and the accompanying Act on Gambling Tax.

For Czech consumers, Finanční Správa aims to protect honest businesses, ensuring a fair market environment while securing tax revenue from the gambling sector.

“Our goal is clear – to protect fair entrepreneurs and ensure that everyone pays taxes according to the same rules. This case is proof that modern analytical tools and the careful work of our inspectors bring concrete results,” said Otakar Sladkovský, Director of the Specialized Tax Office.

Recent amendments to the Act on Gambling Tax introduced significant changes to the taxation and regulation of the gambling industry.

The tax rate on gambling activities, excluding lotteries and land-based casinos, was increased from 23% to 30% of gross gaming revenue (GGR), while the tax rate for online and land-based casinos remained unchanged at 35%.

Additionally, the tax exemption limit for player winnings was significantly reduced, dropping from CZK 1m (€40,000) to CZK 50,000, (€2000) with the revision taking effect on February 15, 2024.

To further regulate the market, licensing procedures were streamlined in 2024, making it easier for EU-based foreign businesses to provide gambling services in the Czech Republic.

Finanční Správa will continue its increased monitoring of Czech gambling licenses. As Sladkovský stated: “Gambling is a specific industry with high tax revenue, and therefore, it is important for us to minimise the space for illegal practices through systematic activities. This success shows that our efforts have a real impact on market fairness and tax collection.”