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The Polish Supreme Administrative Court (NSA) has ruled that a Malta-based bookmaker which aims to provide its services to customers in Poland via a local representative is required to pay Polish corporate income tax (CIT).

The court decided to reject the company’s appeal against a tax interpretation issued by the director of Poland’s Tax Information Service (KIS).

The second instance ruling was issued by the Financial Chamber of the NSA. It confirms an earlier ruling by the Regional Administrative Court (WSA) in Gliwice and concludes a legal battle of more than three years.

The WSA’s ruling from November 2019 describes the Maltese bookmaker’s application for an interpretation from the KIS. The company intended to determine whether it is required to pay the country’s CIT if it launches online bookmaking services in the Polish market and signs a contract of representation with a Poland-based company.

The latter entity would deal with the country’s Ministry of Finance, tax authorities and other public institutions on the bookmaker’s behalf.

The Maltese company’s stance is that, despite the representation contract, it should not be considered subject to the Polish corporate tax, according to court documents.

“The complainant also emphasised that all of its servers used to organise gambling and archive data are located in P. and in Malta — they are not located in Poland (none of the servers or devices of the applicant are located on Poland’s territory, the company also does not use any other servers or devices located in Poland). For this reason, [the Maltese company] does not have a permanent or any other establishment through which it would conduct business activity in Poland,” according to the WSA’s ruling.

Despite these claims, the KIS decided that the bookmaker’s position was “incorrect” under Polish law and, as a result of its business operations, is “subject to a limited tax liability in Poland”. The standard CIT rate in Poland is 19 percent of corporate income.

Should the Maltese company decide to offer its services to Poland-based users despite the NSA ruling, it risks its domains being added to the finance ministry’s blocklist.

Under Poland’s amended gambling law from 2016, which introduced tighter regulations to combat offshore gambling, Polish authorities have been blocking local users from accessing non-licenced gambling websites since 2017. As of December 12, the blocklist consists of close to 27,900 domains.

The NSA ruling identifies the involved company as “B. headquartered in Malta”, using the first letter of its name. The WSA’s ruling from 2019 identified the plaintiff as “A Limited in S. (Malta)”, with the letter “S.” being the first name of the Maltese municipality where the company is headquartered.

Data from the finance ministry indicates that, as of December 8, 2022, some 23 bookmakers were licensed to offer online bets to Poland-based customers.

The ministry’s list includes two Malta-based companies: BEM Operations Limited, a firm headquartered in Sliema and represented in Poland by Wrocław-based company Gaming in Poland Sp. z o.o.; and GM Gaming Limited, a bookmaker based in Gzira and represented in Poland by Gaming in Poland Sp. z o.o.

BEM Operations offers its services in the Polish market under the brand of Betclic, and GM Gaming offers bets under the brand of Betway, as indicated by data from the ministry.

VIXIO GamblingCompliance has reached out to Betclic Group with a request for comment. A spokesperson for GM Gaming said that the company does “not wish to comment at this time”.