Following the Russian invasion of Ukraine in February 2022 and the introduction of the martial law legal regime, the Ukrainian government adopted a law allowing Ukrainian companies to switch from the existing tax system to a simplified tax model.
According to the old law, taxes were paid as follows: gambling operators had to pay an 18% gross gaming income tax (GGR) or a 10% turnover tax on income earned from the use of slot machines and a statutory 18% general personal income tax.
Lottery operators were required to pay a 30% GGR and an 18% general corporate income tax.
In addition, winnings were also subject to 18% personal income tax and 1.5% military tax, which had to be withheld by the gambling or lottery operator as tax agent.
In the simplified model, all companies, including the gaming industry, were subject to a uniform 2% tax on their turnover.
However, this new system was not well received and, according to Ukrainian MP Yaroslav Zeleznyak, operators went from UAH 200,000 (£4,500.62) per day to around UAH 23,000 per day.
After the tax system was simplified, eight operators would have benefited. Subsequently, discussions on the viability of the system for the gambling industry took place in the Ukrainian parliament, and then deputies, including Zheleznyak, introduced law 2713-d, which was aimed at excluding the risk of the gambling industry from application of the simplified tax system in September 2022.
Source: Jamma
