On the use of RFOs: Kuchukhidze's opinion

The position of the head of UGC on the use of registrars of settlement transactions by gambling organizations.

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Should online-only gambling organizers use EDRs? No, thinks the head of the Gambling Council Anton Kuchukhidze. Next - the direct speech:

To unify the single legal approach I, as the Chairman of the Ukrainian Council of Gambling, emphasize that the organizers of gambling, operating exclusively on the Internet are not required to use RFB / RFB. My position comes from the following:

Firstly, the State Tax Service of Ukraine explicitly notes this. On December 20, 2021 the State Tax Service published on its website explanations in the form of training modules for the use of RFB. In Module 5.7 of the clarification the State Tax Service notes that:

• in case of payment for Internet services without physical contact of the seller and the buyer, EDR is not required
• Internet services include games
• payment for such Internet services can be made by means of EPS (electronic means of payment, i.e., in particular, payment cards).

Given that there is no physical contact between the organizer of gambling, which operates exclusively on the Internet, and the player, on such a clear position of the tax regulator could be stopped. But let us elaborate.

The State Classifier of Products and Services (DC) 016:2010 refers gambling activities (including online) to Section R "Services in the sphere of arts, entertainment and entertainment activities". Consequently, the classifier considers gambling activity to be the provision of services. Accordingly, the organization of gambling on the Internet can be considered as Internet services shown in Module 5.7.

Also, it should be remembered that in order to correctly apply the Law on RFO, first of all, it is necessary to determine the place of settlement. STS has repeatedly noted that if services are provided exclusively in electronic form without physical contact with the buyer, the place of settlement cannot be determined and the use of EPO is not required. Examples of this position are individual tax advice of 12.01.2021 № 124/IPK/20-40-07-10-19, of 10.12.2020 № 5129/IPK/02-32-07-05, of 22.10.202 / IPK/99-00-07-05-01-06, as well as many other published clarifications. Consequently, the approach is based on a systematic analysis of the norms of the Law on RRO.

In addition, the Law "On the use of registrars of settlement transactions in trade, catering and services" contains a number of benefits that exempt any company from the use of EDR, even if the transaction is a settlement transaction. In particular, paragraph 14 of Article 9 of the EDR Law stipulates that EDRs are not applied when carrying out settlements for services with the help of remote banking systems and/or money transfer services.

The National Bank in its letter No. 57-0010/2314 dated January 13, 2021 noted that "money transfer services" may include services of nonbank financial institutions licensed by the NBU to transfer funds without the opening of accounts, allowing consumers to pay for goods (services), in particular, remotely.

Almost all organizers of gambling, members of the UGC, make payments to players solely through the services of such non-bank financial institutions.

There are a number of other arguments, but I think these are enough to understand - the organizers of gambling, which operate exclusively on the Internet, are not obliged to use RFB.

Personally, I take expert responsibility and recommend all members of the UGC not to use RFBs.

At the same time I urge the licensed gambling organizers, which are not members of the UGC, to take a principled position in the dialogue with the responsible state agencies on this issue. The law is on our side and the representatives of legal gambling have legal grounds not to burden their activity with redundant bureaucratic procedures. By consolidating the position of absolutely all legal gambling organizers it is possible to achieve our goal.