Government faces failure as gaming giant snubs tax rate bait
Surprise announcement of a 15% tax rate for online gaming companies is unlikely to lure Partygaming and others to the UK
Partygaming finance director Martin Weigold has said the government’s
surprise announcement of a 15% tax rate for online gaming companies in last
week’s Budget is unlikely to lure Partygaming and other online gaming firms to
the UK.
‘I think a 15% remote gaming levy on worldwide income, along with corporation
tax of 28% is unlikely to lead to the relocation of many online gaming companies
to the UK from other jurisdictions, which already have regulatory and licensing
regimes in place,’ Weigold told Accountancy Age.
His remarks are likely to dismay government figures, who have been launching
an unusually concerted charm offensive to try and make the UK a centre for the
industry.
Online gaming companies currently pay little or no tax in various offshore
jurisdictions, and would be looking for a rate of only 2% or 3% to convince them
to return, according to reports.
Asked whether the UK could ever attract the industry, Weigold said: ‘Whilst
there are other countries like Gibraltar, Antigua and Alderney that offer
licensing coupled with competitive tax regimes, I think that will prove a tough
call.’
Partygaming is based in Gibraltar, where a replacement tax regime will be
introduced in 2010 but the levy is expected to be competitive enough to keep
Partygaming there.
Weigold said: ‘I am pleased to say that we have established good
relationships with the government and the people of Gibraltar, and our staff
enjoy working and living there. There are no substantial advantages for us to be
located in the UK.’