Lawsuits By Machine Operators About Amusement Tax Increase Dismissed

September 20, 2021 | Legal

HAMM / ARNSBERG, Germany (September 17, 2021) — The operators of money raffle machines that have nine or five machines running in restaurants, respectively, sued after the amusement tax was increased from 20 to 22 per cent of gross income per machine on January 1, 2020.

German News Agency Deutsche Presse-Agentur GmbH (dpa) reported the lawsuits were dismissed.

Process for slot machines: “Erdosselnde” effect recognized

They had invoked a “strangling” effect of the tax, which made their business no longer worthwhile. In the vending machine industry, this argument is used again and again in legal disputes. The organizers had challenged their entertainment tax assessments for 2020, according to which they should pay a low or medium five-digit amount solely on taxes from their device operation.

Higher taxes on slot machines after a change in the law

Until 2005, there was a low tax per device per month. Then the law changed. Earnings are now counted electronically. With the legal situation that has been in force since 2006, the term “choking tax” was also coined. The arguments of the courts, on the other hand, are often the same: because the market has not noticeably thinned out, the tax cannot have a choking effect. The number of slot machines has even increased, according to a spokesman for the Arnsberg Administrative Court.

In addition, the exhibitors would have another crutch on the way to make the cash register ring for themselves: They could simply increase the prices on their playground equipment. This is what the court argued in this case too. The machine operators would not have exhausted the stake limit per game and could still skim off enough profit.

The verdict is not yet legally binding. The next instance would be the Higher Administrative Court in Münster.

SOURCE: Deutsche Presse-Agentur GmbH (dpa).

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