CONSIDERATIONS ON THE PROCEDURE FOR THE REFUND OF AUTHORIZATION FEES 1t1446
AN INTERPRETATION OF THE PROVISIONS OF ARTICLE 17 PARA. 92 OF O.U.G. 77/2009 ON THE ORGANIZATION AND EXPLOITATION OF GAMBLING GAMES 717267
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by Teodora Luca, Senior Lawyer at C.A. Luca Mihai-Cătălin c3o10
Teodora Luca, Senior Lawyer at C.A. Luca Mihai-Cătălin
According to the provisions of article 17 para. 92 of O.U.G. 77/2009:
(…) no longer owe the remaining difference to be paid from the annual fee, related to the authorization / gambling exploitation authorization, gambling organizers who notify the National Gambling Office that they renounce the organizer’s license or cease to exploit certain gambling activities or means of gambling, as a result of the fact that they no longer meet the legal conditions of organization or exploitation, becoming them incident to legislative changes regarding the conditions of authorization, after the date of obtaining the authorization.
In this hypothesis, the verification of the conditions will be carried out by the National Gambling Office, by issuing a decision of the Supervisory Committee, which will be used in relations with third parties, and the annual fee paid in advance for slot-machines that are no longer in exploitation shall be refunded in proportion to the period between the first of the month following the month in which they cease their activity and the end of the authorized period. The refund of the amounts representing the annual tax paid in advance shall be made in accordance with the provisions of article 168 of the Law no. 207/2015 on the Code of Fiscal Procedure, with subsequent amendments and additions.
The surprising interpretation of the National Gambling Office is that the normative act would condition the exemption of the company from the obligation to pay the authorization fee to the payment in advance of the full amount of the fee (for the 12 months of validity of the authorization), and in the conditions that gambling organizers pay the fees in advance, monthly, they would not be eligible to be exempted from the obligation even after the waiver takes effect and the authorizations cease.
In our opinion, such an interpretation is clearly erroneous.
The provisions of article 17 para. 92 of O.U.G. 77/2009 does not distinguish between companies that have paid the fee in advance for the entire period of validity of the authorization (12 months) and companies that pay the fee monthly, the exemption from the obligation to pay being conditional solely on the impossibility to carry on the activity.
From the analysis of the above-mentioned normative text it is clear that the fact that determines the exemption from the obligation to pay the tax related to the gambling exploitation authorization is not the prior fulfillment of the obligation (as the National Gambling Office erroneously concluded) but the impossibility of the company to continue the exploitation of the authorized gambling means, due to the change of the applicable conditions.
A contrary interpretation is incompatible with the principles of legality, given that, on the one hand, it would add to the law (the condition not being provided for by the normative act), and on the other hand, since it would lead to discrimination against economic operators in the same factual situation (gambling organizers, obliged to cease the exploitation of the authorized means of gambling, as a result of legislative changes), with some being exempted from the obligation to pay the tax for the period during which they are prevented from operating, while companies which have opted for monthly payment of the tax would continue to be obliged to pay the tax even if they are unable to operate.
The final sentence of article 17 para. 92 of O.U.G. 77/2009 is not a condition for exemption from the obligation to pay, but a legislative solution for the situation in which the payment has been made in advance (for which refund is required, pursuant to article 168 of Law 207/2015 on the Code of Fiscal Procedure):
(…) and the annual fee paid in advance for slot-machines that are no longer in exploitation shall be refunded in proportion to the period between the first day of the month following the month in which they cease their activity and the end of the authorized period. The refund of the amounts representing the annual tax paid in advance shall be made according to the provisions of article 168 of the Law no. 207/2015 on the Code of Fiscal Procedure, with subsequent amendments and additions.
According to the provisions of article 168 para. 1 of Law 207/2015 on the Fiscal Procedure Code:
1)Upon request, the taxpayer/payer shall be refunded with ANY AMOUNT PAID OR RECEIVED WITHOUT BEING DUE.
(2) Where a payment has been made without being due, the person for whom the payment was made shall be entitled to a refund of the amount in question
(3) The provisions of this Article shall also apply to amounts to be refunded as a result of the application, according to law, of indirect or other such exemptions
4) By exception from the provisions of para. (1) , the following amounts shall be automatically refunded
- a) those to be refunded, representing tax differences resulting from the annual regularization of income tax due by natural persons, which shall be refunded within 60 days from the date of the tax assessment decision
- b) those collected by attachment, in addition to the tax claims for which the attachment has been established, which shall be refunded within 5 working days from the date of collection at the latest
5) The differences of income tax and/or social contributions to be refunded less than 10 lei remain in the tax records to be compensated with future debts, to be refunded when the cumulative amount of these differences exceeds the mentioned limit
6) By exception from para. (5) , differences of less than 10 lei shall be refunded in cash only at the request of the taxpayer/payer
7) In case of restitution of confiscated amounts in foreign currency, the restitution shall be made according to the law, in lei at the reference rate of the foreign exchange market for euro, communicated by the National Bank of Romania, from the date of the final judgment ordering the restitution
8) In case the taxpayer/payer has outstanding obligations, the reimbursed/refunded shall be made only after the compensation according to this Code
9) If the amount to be reimbursed or refunded is less than the outstanding liabilities of the taxpayer/payer, the compensation shall be made up to the amount to be reimbursed or refunded
10) If the amount to be reimbursed or refunded is higher than the amount representing the taxpayer’s/payer’s outstanding obligations, the compensation shall be made up to the amount of the outstanding obligations, the resulting difference being refunded to the taxpayer/payer
11) If, after the death of the natural person or the termination of the legal entities, amounts to be refunded or reimbursed are established by final court decisions, these amounts shall be refunded or reimbursed only if there are successors or other holders who have acquired the rights to refund or reimbursement under the law.
12) If credit institutions transfer to the tax authority, due to error, amounts representing non-refundable loans or funding received from national or international institutions or organizations for the implementation of programs or projects, as well as the amounts referred to in article 729 para. (7) of Law no. 134/2010 on the Code of Civil Procedure, republished, with subsequent amendments and additions, by exception from the provisions para. (8) , the respective amounts shall be refunded at the request of the credit institution or of the taxpayer/payer, even if the latter has outstanding obligations
REFUND OF AUTHORIZATION FEES
With regard to the apparent condition (full advance payment of the fee), provided for in the Order of the Minister of Finance No. 6652/2024, consisting in the advance payment of the authorization fee for the entire period of 12 months, we consider that its interpretation cannot be interpreted in the sense that the rule would contravene the provisions of the higher-ranking normative act, in execution of which it was issued, (i.e. cannot be interpreted in the sense that the order can limit the rights conferred on companies under article 17 para. 9 2 of GEO 77/2009 and Article 168 of the Code of Fiscal Procedure), otherwise Order 6652/2024 would be unlawful, pursuant to Articles 77 and 78 of Law 24/2000 on legislative technique, according to which:
77) Normative orders, instructions and other such acts of the heads of ministries and other specialized central public istration bodies or autonomous istrative authorities shall be issued only on the basis of and in execution of laws, decisions and Government ordinances. The introductory wording of these normative acts shall contain all the legal bases provided for in Article 42 para. (4) .
78) Orders, instructions and other such acts must be strictly confined to the framework established by the acts on the basis of and in execution of which they were issued and MAY NOT CONTAIN SOLUTIONS IN CONTRAVENTION TO THEIR PROVISIONS.
As long as the company’s right is enshrined in law by the provisions of the superior normative act, an aspect that is unquestionably clear from the content of article 17 para. 92 of GEO 77 (gambling organizers who notify the National Gambling Office of the fact that they renounce the organizer’s license or cease to exploit certain gambling activities or means of gambling, no longer owe the remaining difference to be paid from the annual fee, related to the gambling exploitation authorization/authorizations), the provisions of the lower normative act cannot establish a different legal solution.
In view of these provisions, the interpretation of Order 6652/2024, which would not lead to the conclusion that the normative act is unlawful, is that the approved procedure applies to the refund of amounts paid in advance for the entire period of validity of the authorization (12 months), for all other refund requests the general procedure provided for by the provisions of Article 168 of the Code of Fiscal Procedure will apply, i.e. the company will no longer owe the obligations related to the exploitation authorizations that have ceased to be valid as a result of the application of Article 17 para. 92 of GEO 77, which were not due on the date on which the notification of the cessation of exploitation was sent.
With the cessation of the right to carry on the slot-machine gambling activity, caused by the modification of the exploitation conditions, the obligation of the undersigned to pay any fee imposed by law in exchange for the exploitation of the activity shall also cease.
The tax related to gambling exploitation authorizations for slot-machine type gambling is due, in the situation and for the period in which the economic operator actually exploits the authorized gambling games and obtains income from such exploitation.
Obviously, in cases where the activity can no longer be carried out (being expressly prohibited by the authority, as a result of legislative changes), it is unjustified to require the organizer to pay the fees for such authorizations in full.
The taxes levied on gambling organizers are based on the idea (as is the case with the vast majority of taxes) of taxing an income-generating activity, or if the income has not been obtained and no fault can be imputed to the company, no tax can be imposed.
The taxes are justified only to the extent that the State, through public authorities, offers the payer a service in exchange, in this case the consideration consisting in granting the gambling organizer the right to organize and exploit the gambling games on the territory of Romania, otherwise the tax contravenes the constitutional principle of fair placement of tax burdens, while becoming an indirect expropriation of the economic operator’s available funds, prohibited by law. However, as long as the State, through its bodies, requires the company to cease its activity, the natural consequence (recognized by legislation) is the cessation of the correlative obligation, consisting in the payment of the taxes related to the right to exploit the activity, abolished by the application of the new law.
The authority’s interpretation seems to be based rather on considerations of expediency, the refusal being apparently justified in view of the rapidly growing budgetary needs; this interpretation cannot be accepted and will most likely be overruled by the courts in their analysis of the legality of istrative acts rejecting the application for a refund or exemption from the payment of the tax.
Until these disputes are resolved, however, companies are forced to bear (with increasing efforts) the costs that the istrative authorities’ hesitation generates, in some cases even leading to the loss of the right to operate.
