“From 7.4 Billion Hryvnia Budget, A Little More Than 1 Billion Came To The Budget.”. Interview With A Partner Of Law Firm Sayenko Kharenko
Editorial gamblingread.Com continues a series of interviews with representatives of different professions in the world of gambling. Today, the hero of publication became alina ivy – partner of the law company sayenko kharenko, which heads the direction of gambling. Alina spoke about the difficulties in the tax system and the absence of technical regulations in the industry. And also explained the causes of insufficient revenues to the budget of ukraine from the purchase of licenses by operators.
– alina, hello! Tell us about yourself. What do you do in sayenko kharenko?
– good afternoon! I work in sayenko kharenko for over 10 years, i am a partner of private clients, corporate law and m & a. Indition, heading the direction on gambling.
– why starting your goal of lawyer in gambling entertainment? And why chose exactly this direction?
– everything happened by chance. I have always been interested in this sphere, i play preference and poker for many years. In 2014, i fell into a working group that was preparing the concept of legalizing the gambling market in ukraine. Since then, actively participated in the preparation of draft laws on the legalization of gambling. I am a co-founder and member of the board of the ukrainian association of gaming industry. In december least year, he became part of the consulting and expert council of the commission on gambling and lotter.
Alina ivy – partner of law firm sayenko kharenko
– in august last year, a law was signed on the legalization of gambling activities in ukraine. How to change your work since? Whether you began to apply for legal assistance?
– after the adoption of the law, representatives of large foreign operators, who considered ukraine as a potential market for providing their services. Some of them now in the process of obtaining a license, someone else looks after.
– for what services, customers are most often addressed to you? Do you do business or only consult?
– as i said, foreign customers appeal to me more often. At the first stage, this is counseling on the peculiarities of regulation in this area. For those who have decided to enter the ukrainian market, we create a company and help with obtaining a license.
– in your opinion, what were the real reasons for the prohibition of gambling activities in ukraine in 2009? Howed it be avoided?
– in 2009, slot machines were everywhere. The market had to reform and do more civilized. But, unfortunately, the legislators went on a different way and complety banned gambling, because of which the went to the shadow or began to be conducted under the guise of lotteries (which are not considered gambling).
– do you admit that in the future casinos again banned on the territory of ukraine? And how will the market react?
– i hope that this will not happen. As we see, such prohibitions do not work. In fact, all these years, gambling in ukraine were held, only without any regulation, protection of the rights of players and paying taxes in the budget.
– how would you briefly described the current situation with gembling in ukraine?
– i believe that legalization of gambling is a huge step forward.
Unfortunately, the law is far from being perfect, but it is better imperfect law than his absence.
Unfortunately, there are still many things that constrain the market development. First of all, these are taxes (namely, tightening with the adoption of the law 2713 – e) and the lack of technical regulations.
– what advantages and disadvantages you would have been identified in the current version of the law on regulating gambling activities in ukraine? What amendments now need to make it to work in full force?
– first of all, it is necessary to eliminate the collision on gambling and lottering commission, as well as remove the discrimintory norm that the gaming gaming room must be not closer to 500 meters to educational institutions (there is no such norm for the casino, in addition, the halls slot machines are limited to hotels).
– if we talk about online casino, which requirements are presented to the operator when regisering?
– the operator needs to have a local presence in ukraine (create a legal entity with the authorized capital of at least 30 million hryvnia), bank guarantee (7200 minimum wages), certified online system. In addition, the requirements for the future beneficiary owner of the operator’s.
– as the process of registry of online casino in ukraine looks like?
– first, a legal entity creates, the authorized capital is generated from confirmed sources, it turns out a bank guarantee and certification to an online operator system, then documents are submitted for a license.
– and what about land-based institutions? What are the differences in the registration and licensing process compared to the online casino?
– for land establishments, the process of obtaining a license takes place in several stages: you must first get permission to the room (which it meets the requirement of the law for such a type of activity), then a license directly to the activity itself, and then licenses for game equipment (game tables and slot machines).
– how do you think it is profitable to register the gambling business in ukraine? Or it is worth a wait for some time until the final amendments are made to the law?
– the answer depends on who exactly is going to receive a license. If we are talking about those who are enganed in organizing gambling in ukraine, then they shold register as quickly as possible.
If we are talking about large foreign operators, it is difficult for them to make a decision on entering the ukrainian market, because the cannot compile a financial model will be in the country.
– in ukraine, one of the most expensive licenses for the maintenance of gambling business. What do you think it is connected with?
– one of the goals of legalization of gambling was replenishment of the budget. The fastest and easiest way – expensive licensed payments.
For 2021, the budget laid 7.4 billion hryvnia revenues from gambling. Unfortunately, at the moment a little more than 1 billion came.
First of all, this is due to the fact that the bill of 2713-d has not yet been accepted.
– what is the system of taxation of gambling business now in ukraine? What share of income in the general casino is transferred to the budget? Do you consider it redundant?
– in the tax code, the operators of the hall of slot machines) pay tax on the game income (income minus payments to players) in the amount of 18% and for slot machines – 10% from all income. Indition, all operators pay income tax (18%) and paid game tax (10% for slot machines and 18% for other species) is not taken into account to reduce the taxable operator base for income tax purposes. In addition, all winnings, regardless of size, are raised at a rate of 19.5% (18% income tax + 1.5% military fee). With such a system of taxation, operators work economically unprofitable.
The lawyer believees that the tax tax should strive for zero
– now in ukraine all users winnings are subst to the appropriate tax. However, in many other countries there is no such thing, and casino customers do not pay any contributions. What do you think will be effective to cancel the tax on winning in ukraine?
– foreign operators wh open either only plan to open a casino in ukraine, are counting first of all in foreign tourists. And their lure to ukraine will be very hard with the fact that all winnings are taxed at a rate of 19.5%, while in many countries there is no tax tax. The bill of 2713-d suggested freeing from taxation of winnings up to 8 minimum wages (today 48 thousand hryvnia). It can halls of slot machines, but hardly a casino will help, because foreign tourists are counting on very different winnings.
– high tax rates, expensive licensing … These problems should decide the bill 2713-d. Could you briefly tell about him? And why this law has not yet been accepted, in your opinion?
– bill 2713-d establishes a gas income tax for all types of gambling and for lotteries in the amount of 10%. Indition, it provides that the amount of paid tax on the game income redues taxable income for income tax purposes.
The current version of the lottery provides that a licenseies of online casinos, for the activities of online casinos, for the activities of online casinos, as well as for each slot machine, is paid in three times before launching the online monitoring system. The draft law 2713-d cancels this rate, and also indicates that all license payments that have already been paid in threefold amounts are counted in the account of the following the following.
Also, as i have already said, the bill of 2713-d relies from taxation of the winnings to 8 minimum wages (today is 48 thousand hryvnia).
I do not know why the bill of 2713-d has not yet been adopted, since the nescessity has long been long. The existing tax system is illogical and economicly disadvantageous for operators.
It was the delay in the adoption of this bill is the main cause of insufficient revenues to the budget from licensing payments.
– tell us about the state online monitoring system. For what purposes its implementation is planned?
– the state-owned online monitoring system is planned to control the turnover of gambling operators (rates, paying a winnings), as well as to control the information processing system. In addition, the online monitoring system provides all operator access to the registry of persons who are limited to access to gambling establishments.
Unfortunately, the online monitoring system is not launched, however, the register of persons who are limited to access to gambling establishments is already functioning.
– what do you think is able to provide an online monitoring system to effective control of gambling business in ukraine? Or do you need any additional measures?
– everything will depend on what online monitoring system will. It is very early to talk about it.
– and finally, as to whole, the prospects for gambling in ukraine for the coming year? Is it worth waiting for some positive shifts?
If a bill of 2713-d is adopted, and a technical regulation has been developed, then i expect an increase in the number of persons (especially among foreign operators), which will be obtained for obtaining a license. And the higher the faster we will be area to build a civilized gambling market.
Thank you very much for your time!
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