Denmark has decided to steer away from the usual norm and offered a lowered tax rate to internet casinos operating within the country’s borders. Unfortunately this move has landed them in hot water with the European Commission.
In the meantime a formal investigation has been launched by the EC to investigate the tax rate set forth by the Danish government to internet gambling sites. In the event foreign based internet casinos do receive their licenses they will be eligible to pay the Danish government 25% tax as opposed to the current tax rate of 75% land-based casinos have to pay.
The EC investigates countries that attempts to control its Internet gambling market completely. Countries that are guilty of monopolizing their local casino industry normally impose exorbitant tax rates on internet casinos in order to protect the interests of their brick-and-mortar casinos. Denmark has decided to take a different route and as a result has caught a couple of members within European Union off guard.
The European Commission has notified Denmark that they have received numerous complaints from other European members stemming from their proposed low tax rate. It’s up to the European Union now to decide whether or not the low tax rate in Denmark will give internet casinos an edge. Should they find this to be the case, Denmark might face a hostile ruling after the enquiry is concluded.
Other members of the EU have been encouraged by the EC to share their views relating to this matter as well. Before making a pronouncement the EC will take opinions given into consideration. In 2009 the Danish government has decided to forego its gaming monopoly. The inception of this new tax rate will only be in January 2011, but it must be approved by the EC first before it can be implemented.
Numerous companies have invited foreign internet casinos at the behest of the European Commission. The majority of European countries consented to the EC’s demands, but the U.S still continues to ignore International trading agreements between EU members with their internet casino gaming laws.