Online gambling: Belgium restricts VAT exemptions

9 February 2017

Belgium has restricted VAT exemptions on games of chance and gambling. These amendments affect, among other things, online sport betting and poker games.

The legislation affects what it terms ‘games of chance or money’ and ‘lottery’, which it defines as follows:

• Games of chance or money:

– Games which give the player a chance to gain prices or bonuses in money or in kind. In such games the players can intervene neither at the beginning, neither with the course, nor at the end of the game, and the winners are only designated by fate or any other random circumstance;

– Games which give participants the chance to gain prices or bonuses in money, or in kind, unless competition leads to the concluding of a contract between the winners and the organiser of competition;

• Lotteries: each circumstance allowing by the purchase of lottery ticket to contribute for prices or bonuses in money or in kind, where the winners are designated by the fate or any other random circumstance on which they cannot exert any influence.

The legislator then modifies the text of the exemption of article 44 §3, 13° Belgian VAT Code, and exempts from VAT:

– Lotteries;

– Other games of chance or money, with exception for those provided by electronic means;

The VAT will not be calculated on the individual player setting, but on what the organizer keeps after the payment of the possible profits to the individual players. The same VAT system will also apply on transactions between the organizer of online games abroad and the players established in Belgium. If these organizers are not compliant with Belgian VAT, the administration will have the possibility of recovering the VAT due on the Belgian players.

Thus, companies and people offering Belgian players games and bets online will be required to pay Belgian VAT.

Let us note finally that this new VAT mode does not modify the specific local ‘Tax on the games and bets’, which is a regional competence, and which thus remains.

Conclusion:

From now on, there are two VAT distinct rules applicable to the games of chance and money, according to the way in which they are practiced:

– Lotteries: online or not – and games of chance off line remains exempt from VAT;

– Games of chance and money online are subject to VAT (rate of 21%). The organisers of these online games must be registered with the Belgian VAT administration.

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