Ukraine re-instates 18 percent GGR tax rate

Content Team 10 months ago
Ukraine re-instates 18 percent GGR tax rate

Ukraine has reinstated the tax rate applied to the gross gaming revenue (GGR) of online casinos, which had previously been abolished during martial law.

Introduced through a seemingly unrelated bill passed by parliament that attained 226 votes, this action surprisingly sees the tax rate increase to 18 percent. 

This new rate is hoped to enrich the state’s treasury by UAH1.5 billion ($40 million) and forms part of a new bill which is focused on enacting a tax exemption for maritime trade. This bill has therefore superseded a previous exemption for online products.

The gaming exception

In April 2022, the Ukrainian tax code was temporarily amended to allow gambling operators to pay a simplified 2 percent tax on turnover, causing a significant reduction in tax contributions.

This saw an incredible tax reduction from payments close to UAH200,000 ($5,500) per day to UAH23,000 ($650) per day. 

The International Monetary Fund

In January of this year, several incentives which were enacted by the Verkhovna Rada to support the inevitably struggling economy were abolished by the passage of a new bill.

Developed by the Ministry of Finance this new legislation was developed with the intention of aligning the borderlands with a new memorandum involving the International Monetary Fund after it suffered a 2022 deficit of over UAH900 billion ($24.5 billion).

This then saw online casinos in Ukraine forced to pay 18 percent of the corporation tax with an additional 1.5 percent military levy. This resulted in a 4 fold increase in taxation rates applied to gambling operators for the first half of 2023. 

Additional GGR tax

This new bill has replaced a further exemption that Ukrainian gambling operators have been enjoying, by re-introducing the 18 percent GGR tax to accompany the aforementioned levies, the tax burden is expected to return to levels similar to those applicable in peacetime.

Ukraine re-instates 18 percent GGR tax rate.
Verkhovna Rada, Kiev, Ukraine.

Double taxation complaints

These tax measures have come in light of a 2020 gambling re-regulation which saw a great deal of criticism levelled at the Ukrainian government for a so-called “double taxation”, the likes of which are being brought back into fruition after the passage of these bills.

These were initially thought to be a temporary set-up prior to the complications of the Russian invasion with objectives to devise a central state monitoring system placed on the backburner. 

SiGMA Balkans/CIS

As a globally recognised nexus for networking, SiGMA Group sets its sights next to the Balkans this September, when the SIGMA Balkans/CIS Summit heads to Limassol Cyprus.

A host of networking opportunities and industry-leading knowledge will be emanating from the much-anticipated event which will pack panel discussions, keynote speeches, start-up pitches and much more into 3 days in the diverse Cypriot city.

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