• VAT on online gambling games - Administrative tolerance ended on 30 November 2016

VAT on online gambling games - Administrative tolerance ended on 30 November 2016

Pascal Dauw, Partner |

14 December 2016

Online gambling games (e.g. sportsbook, online casino,…) became subject to VAT as from 1 August 2016. As a consequence, the organizers of such games needed to become registered for VAT purposes on 31 July 2016 ultimately.

Gambling and cash games which are not supplied electronically remain exempt from VAT (e.g. gambling machines in a casino and lotteries).

Tolerance ends

Due to uncertainty about the scope of this new legislation, the Belgian VAT Authorities allowed a tolerance for transactions performed between 1 August and 30 November 2016. This tolerance now ends, meaning that the VAT on transactions performed in this period, must ultimately be paid by 20 December 2016 (monthly VAT returns) or 20 January 2017 (quarterly VAT returns). If not, penalties and late payment interest can be imposed.

Joint liability

The new legislation also introduces joint liability, meaning that when the supplier of electronic gambling games has neglected to account for the Belgian VAT (via a Belgian VAT return or a MOSS-return), the participant (private individual) can be held liable to account for the Belgian VAT due.

Right to deduct (historical) input VAT

Due to the fact that online gambling is no longer a VAT exempt activity, the input VAT on company assets which still exist on 1 August 2016 can still be recovered for 1/5th or 1/15th  (depending on the asset) per calendar year which has not passed by. This amount can be set off against the VAT due via the periodical VAT returns (provided the necessary inventories are provided to the Belgian VAT authorities).

Administrative Circular provides more insights

On 13 December 2016, the Administrative Circular no. 32/2016 (no. E.T.130.082) of 30 November 2016 was published.

The Circular provides more details on the definition of “gambling games” and “electronically supplied services”. In addition, special attention is paid to the term “minimal human intervention”, which needs to be determined in the relation between the player and the organizer of the gambling game.

Furthermore, the Administrative Circular elaborates more on practical issues like determining the place of supply of the service, determining the taxable base and VAT amount, VAT treatment of bonuses etc.

Foreign service providers

For foreign suppliers of electronic gambling and cash games, a Belgian VAT registration may become mandatory, as electronically supplied services are taxable at the place where the end-customer (private individual) resides. As an alternative, these foreign suppliers could submit MOSS-returns in another EU Member State. This requires, however, that the supplier is already registered for VAT purposes in that Member State.

Contact

Should you have any further question or require a personal advice with respect to the impact of these rules on your company, please contact your usual contact person at BDO or you may send an email to [email protected] for the attention of one of the members of the VAT Competence Centre:

  • Erwin Boumans, 02/778.01.00
  • Brigitte Braeckmans, 03/230.58.40
  • Pascal Dauw, 09/210.54.10
  • Kaatje Bondewel, 02/778.01.00