EU court clarifies VAT rules for gambling businesses – key insights for operators in the industry
Written By
Counsel
Netherlands
I am a VAT specialist with vast experience working for different clients across multiple countries, sectors and practice groups. I joined Bird & Bird as Head of VAT Netherlands in 2022. I work from our offices in The Hague and Amsterdam.
On 12 September 2024, the Court of Justice of the European Union (CJEU) ruled two cases related to VAT and gambling activities, i.e. Casino de Spa (C-741/22) and Chaudfontaine Loisirs (C-73/23). These cases provide insights on the EU VAT exemption for gambling, how these are applied to different forms of gambling and what the impact is for operators in the industry.
What was the issue?
Casino de Spa and Chaudfontaine Loisirs claimed refunds of the VAT they had charged on their online gambling activities in Belgium. They argued that their online gambling activities should have actually been VAT exempt, similar to (online) lotteries and land-based gambling.
The CJEU, however, ruled in both cases that EU Member States like Belgium are allowed to treat different types of gambling, such as online versus offline, differently for VAT purposes if these differences are clear for the average consumer. For example, lotteries often involve a waiting period and lack of influence by the consumer, whereas other forms of gambling may require skill or knowledge and result in a direct outcome.
Why is this important for operators in the industry?
These cases are important because they show that different types of gambling can be taxed differently for EU VAT purposes. As the VAT exemption for gambling is subject to conditions and limitations set by each EU Member State, gambling businesses need to pay attention to the VAT rules in each EU Member State where they operate, because they cannot assume the same rules will apply everywhere. Knowing the local VAT rules and how to manage these with VAT controls in the business is key to meeting VAT regulatory requirements across the EU Member States.
What can you do now?
We recommend that gambling businesses review and understand the VAT rules in each EU Member State where they operate. We also recommend considering the characteristics of their gambling activities and how these may be perceived by the average consumer, as this can impact the VAT treatment.
For further discussion on how EU VAT impacts your gambling business, please contact Andy van Esdonk, Aïsha Uwugiaren or your regular Bird & Bird contact.
