High Court has found that the point-of-consumption tax regime that was implemented in the UK in December raises issues of European law and should be decided by the Court of Justice of the European Union (CJEU).

The Finance Act 2014 changed UK online gambling taxation laws to outline that operators based outside the UK would be liable to pay tax, regardless of the tax they pay in the jurisdiction where they are based.

The Gibraltar Betting and Gaming Association (GBGA) instructed law firm Olswang to issue judicial review proceedings in October, asking the High Court to judge the lawfulness of the tax regime within the Finance Act.

GBGA unsuccessfully appealed against a new licensing law in October, which requires remote gambling operators and providers to obtain a remote licence from the UK Gambling Commission and was implemented in November.

High Court judge Lord Justice Green ruled that the licensing law was not unlawful under EU or domestic law, and GBGA was later granted a judicial review into the tax regime.

The judicial review has resulted in Mr Justice Charles handing down the judgment that the tax raises issues of European law and a formal reference of the case will now be made by the High Court to CJEU.

HMRC could be ordered to repay the tax it has unlawfully taken should the regime be found to be in breach of European law.