UK PROPOSES TAX FOR ALL ONLINE GAMING COMPANIES UPON A 'PLACE OF CONSUMPTION' BASIS

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20.08The UK government has made its intentions clear towards gaming companies who have traffic derived from UK customers. The government has proposed new regulations, which mainly stipulate that despite the jurisdiction of where a company is incorporated – it will pay taxes in the UK if sales have derived from the UK. The new regulations on gaming companies are proposed to take place next year. The current UK gaming legislation allows companies to be incorporated offshore, which entitles them to the benefit of tax avoidance within the UK. From next year onwards, companies planning to avoid paying taxes in the UK will be either disciplined by immense fines or imprisoned for seven years with the result of losing their gaming license. The move towards taxing upon ‘a place of consumption’ rather than a ‘place of supply’ is estimated to produce a new revenue stream of ₤300 million pounds per annum. Sales from gaming are estimated at ₤2 billion per year in the UK. The current tax rate which UK gaming companies are imposed by is 15%.