On 15 July 2021, the Ukrainian Parliament passed a draft law in the first reading that sets the regulatory framework for taxation of gambling in Ukraine (Gambling Taxation Draft).
A law providing the general legal framework for gambling activities in Ukraine is effective since August 2020. Gambling operators, however, cannot fully benefit from the established regime since specific taxation rules have not been implemented. If ultimately passed into law, the Gambling Taxation Draft will provide these rules by introducing the following key taxation conditions:
- Gross gaming revenue is subject to a 10% tax for all kinds of gambling activities (except for activities of B2B supply of gambling software) (Gambling Tax);
- Gambling operator’s profit from gambling activities (decreased for the amount of deducted Gambling Tax) is subject to 18% corporate income tax (CIT);
- Other profit of gambling operators (than received from gambling activities) is taxable with CIT on general terms.
Another new feature of the Gambling Taxation Draft is the repeal of the requirement to pay the triple rate of gambling license fees until the launch of the State System of the Online-Monitoring of Gambling. Consequently, the already conducted triple payments will be proportionally set off as annual payments of gambling operators for the next years.
In terms of the taxation of individuals, winnings of up to eight minimum statutory wages (currently UAH 48,000 or EUR 1,550) are exempt from taxation. The winnings of individuals above this amount will be taxed with an 18% personal income tax and a 1.5% military levy.
The above provisions are based on the text of the Gambling Taxation Draft as of its first reading (i.e. the initial stage of adoption), which may differ from the final version. Gambling Taxation Draft is yet to be considered by the Ukrainian Parliament in a second reading and promulgated by the President of Ukraine.
For more information on further developments of the gambling taxation framework in Ukraine, contact your regular CMS advisor or local CMS experts: Olga Belyakova, Mykola Heletiy, Viktoriia Stavchuk.
In turn, an overview of the general regulation of gambling in Ukraine can be found following the link.