authorisation requirements , including payment of relevant taxes ( lists and decisions are accessible at http :// onjn . gov . ro /).
Operators interested in operating online gambling in Romania must hold a Class 1 licence and one or several authorisations ( their number and type vary depending on the type of gambling involved ). In addition , operators interested in performing activities related to online gambling must apply for a Class 2 licence ( e . g . operators who hold management and integration platforms specific for remote games of chance , operators of data / storage centres etc .). Class 1 licences are valid for ten years and authorisations are valid for one year ; both are subject to annual fees .
The Office handles all licence and authorisation applications ( which includes all relevant documentation required by law to prove the applicant ’ s background , good standing and capacity to perform the relevant gambling activities ( e . g . corporate documents , share capital threshold , directors ’ criminal records , requirements regarding technical equipment specific for online gambling etc .). The Office will not grant licences to operators with outstanding payment obligations to the state budget or who have had a previous licence cancelled ( within the five years prior to the date of application ) or revoked ( within the last year prior to the date of application ).
EU , EEA and Swiss Confederation based operators are eligible to apply for licences and authorisations ( without the need to have a permanent establishment incorporated in Romania ). In addition , the law provides a simplified licensing process for operators who are already licensed in an EU , EEA or Swiss Confederation state . In such cases , the Office may acknowledge that certain licensing requirements are met based on evidence and relevant documentation provided by the applicant ( or the corresponding regulatory gambling authority in the respective state ) proving that it meets equivalent requirements in that state and that it holds a valid licence for the relevant gambling activity . Operators of online gambling established and authorised in a different state , must appoint an authorised representative ( with fiscal or corporate headquarters in Romania ) in order to represent the gambling operator before Romanian authorities and for the purpose of carrying out gambling activities in Romania .
Licensing and authorisation requirements differ depending on the class of licence and type of authorisation involved and are subject to separate applications and procedures . However , the process is straightforward and applications for both licences and authorisations may be submitted at the same time , along with the relevant documentation applicable for each procedure . While the Office is entitled in certain circumstances , to request additional documentation regarding an application , in practice , the award process takes between two to four weeks to complete .
Fees and taxes Licence and authorisation fees The costs for undertaking online gambling in Romania can be significant . Mandatory licence and authorisation fees are due annually , prior to commencement of gambling activities . For Class 1 licences , the annual licensing fees range from EUR 6,000 to EUR 120,000 . For Class 2 licences , the annual licensing fees are EUR 6,000 , for each type of ancillary activity . The annual authorisation tax for remote games of chance is 16 % of the gross gambling revenue ( but not less than EUR 100,000 ). In addition , other special taxes apply , such as , the EUR 2,500 tax for analysis of an application for a licence for online gambling activities which must be submitted along with the application documents , and the EUR 8,500 annual tax issuing the licence .
Corporate income tax Although Romanian tax law does not explicitly require non-resident online operators to register in Romania for corporate income tax purposes , online operators that have a permanent establishment (“ PE ”) in Romania are required to register in Romania for corporate income tax purposes .
A PE is defined as a fixed place of business through which the activity of a non-resident is wholly or partly carried out , such as - a place of management , a branch , or an office . A PE may also be deemed to exist if a non-resident conducts business in Romania through a dependent agent . Given the fact that online gaming activities involve the selling of services and transmission of data over the internet , online gambling providers may also be seen as electronic commerce (“ e-commerce ”) businesses – thus triggering additional criteria for determining the existence of a PE . Depending on the location of the server / computer equipment and any support functions performed in Romania , it is possible that a PE may be found and corporate income tax owed . However , the current perspective on defining the PEs of e-commerce businesses based on the location of their server is changing due to OECD reports and actions addressing Base Erosion and Profit Shifting (“ BEPS ”). Once Romania implements BEPS , the previous positions taken by the tax authorities will no longer be relevant . As a result , when determining if they have a PE in Romania , foreign operators should focus on the functions to be performed in Romania including the ones arising from regulatory requirements ( e . g ., payment processor , mirror and security servers , legal representatives , etc .).
Tax compliance obligations Irrespective of the corporate income tax assessment , non-resident operators must
European Gaming Lawyer | Autumn Issue | 2017 | 11