The legalized online gambling market in Albania needs permanent transparency and accountability

Still in the absence of an official presentation of the draft of the new gambling law, the greatest interest is about the way of organization, the conditions for organization, their organization and the participants in this model that is now considered to be carried out only via Internet.

In the Albanian economic reality, this is an innovation since no activity has been presented to the public until today through services that are offered 100% from the Internet.

Through the way of tax treatment in other countries that offer this activity via the Internet, gambling will be organized through electronic platforms approved by AKEP and AKSHI, which will interact to realize the possibility of monitoring the activity.

On the one hand is AKEP [1] the one that, through the scope of action, licenses and authorizes online websites in Albania, as well as, on the other hand, National Agency for Information Society (alb. AKSHI) [2]

the one that enables the development of the activity through e-albania and integration with fiscal registrations according to the fiscalization instrument.

From what can be compared with the legislation of other EU countries, which have similarities regarding the mechanism of online gambling, even in Albania from 2023, gambling service providers must meet numerous requirements to obtain a concession in this field of activity.

In principle, it remains the case that prohibited types of gambling cannot be offered or mediated. In addition, minors and banned players must be excluded from participating in gambling (in accordance with the respective country’s ban file). One of the new provisions is that the gambling service provider must allocate a gaming account to each player.

Tax treatment of gambling

The organizer of online gambling (Organizer) is expected to be subject to tax on profit at the level of 15% for the service it offers electronically, as well as tax on the dividend at the level of 8% of the net profit to be distributed, in addition to being exempt from VAT.

So, the Organizer keeps the 25% withholding tax (according to the draft version) and in the role of tax agent pours it into the budget according to the provisions of the income tax law.

Meanwhile, for certain fees determined by the licensing criteria, as well as those for the way the service is organized, other fees can be paid.

Other tax obligations for the organizer are local taxes and fees, as well as insurance contributions for employees.

Taxable base, tax rate and time of accumulation of special taxes

The taxable base for gaming tax is the relevant share made by the player (gross amount), minus the amount of the virtual gaming tax or online poker tax. The stake includes all expenses incurred by the player to get a chance to win the game.

According to the VAT Law [3],

in article 43 it is provided that “The supply of bets, lotteries and other games of chance, in the sense of the law on games of chance, are exempt from VAT. Excluded are those game supplies defined in the specific law “On games of chance” and which are taxed according to the provisions of this law.

Based on this treatment in force the draft of the new gambling law will adapt to this VAT treatment of online gambling in the future.

According to the current Income Tax law [4] in its article 4 it defines as a source of income and in article 8 also as taxable income (letter gj.) income from gambling.

Currently, the gambling tax is 15% of gross income [5] (the income you earn from the successful completion of a game of chance).

A player who meets the criteria for the annual declaration of his income will also be subject to the declaration of gross income, where the withholding tax, which has been withheld by the organizer of the game, at the time of earning an income from the game is also presented. luck.

The tax rate with the draft of the new gambling law seems to reach 25% of the income that an individual gains from online gambling.

It is hereby understood in advance that virtual slots and online poker games are subject to a uniform tax rate of 25%. The time at which the tax is made is the point when the effective game is made. This is the only and final tax on the player.

Likewise in the new draft law on income tax [6], the source of taxable income is defined even more clearly, as well as the way of realization of income and their taxation, but the tax rate is determined in the draft of the new gambling law.

The mechanism that identifies the income obtained from the online gambling game is precisely the part that is the innovation, managing to identify the player through the identity card and the registration now the amount is won, signaling the monitoring system and the registration in the database for this purpose, which has the format of a fiscal register.

The political decision is expected to bring much-needed revenue to the government, which faces a debt of over 68%, increasing pressure to subsidize rising energy costs and calls to support vulnerable groups amid the global crisis.

Effective from the beginning of next year, sports betting games will now be legal, and it is estimated that around €17.5 million will be collected in taxes and duties each year [7].

This innovation in fiscal policy comes after a rematch against them by the government, where all gambling, except for a small number of licensed casinos, was banned as of December 31, 2018.

Thousands of betting sites and gambling sites were closed, and attempts were made to block online sites.

However, gambling continued across the country in illegal betting and gambling shops, with arrests weekly.

The announcement from the Prime Minister’s Office and those from the Ministry of Finance and Economy emphasize that the change in the new law includes the restoration of sports betting “under strict regulatory conditions”.

The market rules will be guaranteed by large international companies, which operate worldwide and in the European Union area, but no specific and more complete information is given yet to be able to see the whole panorama of the functionality of the law of young.

At the end of the information, the risk of money laundering should also be kept in mind during the consultation of the draft law. No further than in the end of last year 2022, the European Commission to increase its level for downloading money in online gambling at the end of 2022. of criminal activity.

[1] https://akep.al/rreth-akep/
[2] https://akshi.gov.al/akshi/rregullore/
[3] https://www.tatime.gov.al/shkarko.php?id=2034
[4] https://www.tatime.gov.al/shkarko.php?id=12027
[5] the gross revenue from the game is the amount left to the organizer from the difference between the total amount played by the players in the games of chance and the amount won by them. Profit tax is calculated in accordance with the provisions of this law (Law on Income Tax).
[6] https://konsultimipublik.gov.al/Konsultime/Detaje/474
[7] In the forecasts of the state budget for the fiscal year 2023, it is mentioned that “from the approval of gambling in the law, it is estimated that 2 billion ALL will be collected in the state budget”. Meanwhile, with the clarification of the draft for discussion in the Assembly Committees, it is necessary to see which of the tax items will fill the state budget to complete the planned amount of 2 billion ALL.