The Federal Administrative Court halts Dortmund's betting shop tax collection.
Over the course of three years and earning approximately 1.5 million euros, the city of Dortmund must withdraw their gambling office tax. This tax failed the test of the Federal Administrative Court due to legal challenges brought upon by three gambling companies. The debate now arises as to whether Dortmund will be required to compensate these companies.
Initially, the betting shop operators faced unsuccessful appeals. However, the Federal Court in Leipzig eventually ruled in favor of the three plaintiffs. Though the fundamental legality of a gambling tax was not disputed, the judges determined that the method of assessment used in Dortmund - square meters of store space - was not legally permissible. Suitable factors, including stake size, winnings, or turnover should be considered instead.
Dortmund's method of area taxation has now been invalidated. This method is considered arbitrary since there's limited connection between store space and overall revenue. The local authorities may likely endure financial consequences for this faulty assessment basis. The gambling operators are demanding reimbursement of their tax contributions, as they were levied unlawfully according to the current ruling. It seems likely these plaintiffs will receive compensation. The only uncertainty is if the three affected shops will be the only ones to receive damages, or if the entirety of Dortmund's tax revenue needs to be returned.
The primary reason for the lawsuits was the unequal treatment of betting shops and lottery outlets. While betting shops endured taxation, lottery outlets remained exempt. If the three plaintiffs are awarded compensation, other betting shops in Dortmund might also pursue legal action and claim damages.
This decision could have repercussions beyond Dortmund. This city is not the only municipality using taxation based on area. Aachen, Bielefeld, and Herne also apply this principle. Operators of these betting shops will be closely monitoring this case, as they could potentially request compensation as well. With a ruling from the highest court, these claims would be difficult to dismiss.
Dortmund's administration is currently discussing the maintenance of the gambling tax. The city director, Jörg Stüdemann, regards the tax as an important measure for preventing gambling. However, the Taxpayers' Association expressed their opposition to the continuation of this tax, claiming it contributes minimally to tax revenue while causing increased bureaucratic costs. If the city is compelled to repay the tax, it would have only resulted in expenses.
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Source: www.onlinecasinosdeutschland.com
