Point of Consumption Tax Introduced For Offshore Operators in SA

For years, Australian lawmakers have been wondering what to do about the influx of offshore gambling operators that have started offering their services to local players. Since they aren’t licensed in the country, they don’t pay taxes that contribute to community programs – and, the SA government has finally come up with a solution. The new Point of Consumption Tax will require offshore operators to pay taxes in Australia despite being licensed overseas.

This the first time in Australia that offshore gambling operators will be charged tax based on where they make their money rather than where they are based geographically. It follows the example set by the United Kingdom, which introduced a point-of-consumption tax for gambling operators in 2014. This ensures that operators will pay their fair share of tax to the local government, which will help to benefit a number of community programs.

“If betting companies are making profits from South Australian punters they should be paying tax in South Australia, not whichever jurisdiction their head office and servers happen to be located,” says Tom Koutsantonis, State Treasurer of South Australia. “By implementing a wagering tax based on the place of consumption, we are ensuring that businesses are paying taxes in the jurisdiction in which they are making their money.”

The tax will apply to wagers that are placed on a wide range of sports and novelty markets. Popular sports like cricket, football and rugby will be taxed, along with niche sports like greyhound racing. Novelty bets will also fall under the taxable activities, such as betting on who will win the next election or which film will win Best Movie at the Academy Awards.

The new tax will be introduced in 2017. Operators who make over $150 000 per year will be charged 15% on all gambling revenue generated by South Australian residents. It is anticipated that the tax will generate an additional $9.2 million per year in tax revenue.

The first $500 000 that is generated every year will be offered in perpetuity to the Gamblers Rehabilitation Fund, which helps to pay for services that minimise gambling harm and assist those who have been affected by problem gambling. This will mark the first time ever that gambling operators will be contributing to the fund in order to assist individuals who are struggling with gambling addiction.

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