Balearic Court Rejects €130K Gaming Tax Refund for COVID Closures

The Balearic Superior Court has dismissed an appeal from gaming operator Oper Ibiza, S.L., denying their claim for a €130,798.98 refund of gaming tax paid for the first quarter of 2021. The company argued their slot machines were forced to close for 79 of the quarter's 89 days due to COVID-19 health restrictions imposed by the regional government.

Court Aligns with Supreme Court Doctrine

The Administrative Chamber of the Tribunal Superior de Justicia de Baleares ruled strictly in accordance with Supreme Court precedent, determining that gaming tax liability stems from holding operational permits rather than actual machine usage. The court emphasized that the taxable event is not tied to effective machine exploitation or resulting income generation.

“The taxable event of the fiscal tax is not linked to the effective exploitation of the machine and the consequent obtaining of income derived from it, but to the granting of the authorization that enables exploitation”

— Tribunal Superior de Justicia de Baleares ruling

Originally in Spanish

Missing Legislative Framework Proves Decisive

A critical factor in the court's decision was the absence of specific Balearic legislation covering the first quarter of 2021. While the autonomous community had approved 75% exceptional bonifications for the second quarters of both 2020 and 2021, no such measures existed for the disputed period.

The ruling clarifies that judges cannot apply tax reductions without explicit autonomous law establishing such bonifications, adhering to the principle of legislative reserve in tax matters. For taxation purposes, what matters is having a valid permit on January 1st regardless of external factors preventing machine operation.

Operator's Economic Capacity Argument Fails

Oper Ibiza had contended that forcing them to pay taxes on inactive machines violated economic capacity principles, arguing that the taxable event should require actual business activity rather than mere permit possession. The company maintained their machines in hospitality venues couldn't generate revenue during mandated closures.

However, the court rejected this interpretation, emphasizing that authorization-based taxation remains valid regardless of operational constraints imposed by health emergencies or other external factors.

Broader Implications for Gaming Sector Taxation

This ruling establishes important precedent for how gaming tax obligations apply during force majeure events. The decision reinforces that permit-based taxation systems continue operating independently of actual business activity, placing regulatory compliance burdens on operators even during government-mandated closures.

The judgment highlights the crucial importance of proactive legislative measures during crisis periods, as courts cannot substitute judicial discretion for explicit statutory frameworks in tax reduction matters.

According to AzarPlus.