Interview: How is Isle of Man gaming sector coping with PoC tax?

Interview: How is Isle of Man gaming sector coping with PoC tax?

Tuesday, January 13, 2015

The Isle of Man believes the New Year could bring new prosperity as it adapts to the point of consumption (PoC) tax era.

As one of Europe’s major e-Gaming hubs, the British Crown dependency was always likely to be one of the jurisdictions hardest hit by the UK’s introduction in 2014 of 15-per-cent gross profits PoC taxation and the requirement to hold a UK licence.

With multinational companies no longer benefiting quite so much from low tax regimes such as that available in the Isle of Man, many felt that the island’s 56 licensed online gambling operators, such as Paddy Power, might quickly relocate.

However, Peter Greenhill, chief executive for e-Gaming development with the Isle of Man Department of Economic Development, has told TotallyGaming.com that with the taxation changes now done and dusted, the jurisdiction and its existing and potential licensees have found that maybe there is not so much to fear.

“Now that the new UK legislation has come into force and the accompanying uncertainty has died down, we have already seen an increase in requests for information from potential new licensees and software houses looking for the right home to base and grow their gaming businesses,” Greenhill said.

“A significant number of our Isle of Man licensees have operations outside the UK and Ireland and they are therefore less affected by these types of taxes than those licensed in certain other jurisdictions. We have always attracted both operators and suppliers to the e-Gaming industry to establish their base on the island and build their business from here.”

"Now that the new UK legislation has come into force and the accompanying uncertainty has died down, we have already seen an increase in requests for information from potential new licensees and software houses." - Peter Greenhill

The Isle of Man was always realistic about the introduction of PoC taxation and chose not to go down the route that saw Gibraltar challenge the UK’s changes at the High Court and Malta’s 11th hour complaint about Ireland’s Betting (Amendment) Bill 2013.

Instead, the Isle of Man focused on how it could help its licensees adapt to PoC changes, with the most prominent aid being the introduction of Double Duty Relief, which allows companies to claim PoC relief up to a monetary maximum equivalent to the amount of gambling duty that would have been paid to the Isle of Man Treasury on the same activity.

Greenhill, who took up his role in 2013 after senior positions in the banking industry and gaming companies such as Camelot and Gala Coral, added: “We decided that trying to prevent such changes was unlikely to be successful and so dedicated our efforts to easing the path forward for Isle of Man licence-holders.

“This has resulted in several benefits to them including not having to appoint a fiscal representative in the UK for the payment of the PoC Tax - a very major cost saving. This agreement means that our Gambling Supervision Commission can act as a dispute resolution provider between licence-holders and UK players.”

Now the Isle of Man is looking ahead and believes it retains many of the pull factors that helped it build an e-Gaming sector that is worth 13 per cent of its economy.

The Isle of Man government has openly said that it wants to be at the forefront of the digital currency development boom, and is hoping that being at the head of that field, which took huge steps forward in 2014, could help drive a new era of success.

Greenhill said: “With each new year we see new challenges and new opportunities. In 2015, we will see major moves forward in digital currency acceptance in the regulated gaming space and our first mover advantage in this area is looked on with great expectations.

“The Isle of Man has an excellent reputation for the quality of its power and telecommunications infrastructure that supports our operators and software providers ensuring the continuity of service that those companies rely on to properly serve their customer base.”

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