The gambling VAT exemption across the EU

 Member State  Application of Article 135(1)(I) of the EU VAT Directive               Legal Reference       Austria In Austria, the exemption applicable to gaming and gambling activities also applies to gambling provided electronically. The exemption applies to:     bets (esp. sporting bets), which do not qualify as gambling as the win or loss is not predominantly depending on luck; and     draws defined as games of chance  which an entrepreneur arranges, organises, offers or makes accessible; for which players or others provided monetary benefit or benefit in kind to participate; and in which the prospect of monetary benefit or benefit in kind is offered by the entrepreneur, from players, or from others. Sec. 6 (1)(9)(d) Austrian VAT Code    Gambling services performed with gambling machines and Video Lottery Terminals (centrally connected Terminals used for electronic lotteries) are excluded from the scope of the exemption.The taxable basis for supplies made with gambling machines or Video Lottery Terminals exclude paid out wins. There are no specific guidance in the Austrian legislation regarding the VAT treatment of bonus points/credits earned as part of e-gambling activities and such treatment should be analysed on a case by case basis. Sec. 4(5) Austrian VAT Act  Belgium In Belgium all bets, lotteries and gambling or cash games are VAT exempt. A broad interpretation of the exemption extends to electronic services as well. Article 48 of the Bulgarian VAT Law and Article 41 of the Gambling Act    Article 44, para3, 13° of the Belgian VAT Law and VAT Royal Decree n°45 defines the scope as:a) Any game with a chance to win a prize in money or in kind during which players cannot intervene neither at the beginning, during or at the end of the game; winners being designated randomly or by any other fortuitous circumstances.     b) Contests through which the winner can win a prize in money or in kind unless the contest may result in the conclusion of a contract between the winner and the organiser.There is no specific guidance in the Belgian legislation regarding the VAT treatment of bonus points/credits earned as part of e-gambling activities and such treatment should be analysed on a case by case basis.    Bulgaria  In Bulgaria, the provision of games of chance, within the meaning given by the Gambling Act, is exempt. Games of chance include: lotteries, betting on outcomes of sports competitions and horse and dog races, betting on Chance Events, and betting on guessing of facts, games played with gambling machines and casino games. The manner, technical means and electronic communication means or services, via which a game of chance is organised and offered, does not affect the VAT status of the service.  Article 48 of the Bulgarian VAT Law and Article 41 of the Gambling Act  Croatia According to the Croatian VAT Act, lotteries, games of chance within casinos, betting games and games of chance on machines are VAT exempt. This exception should also apply to E-gambling activities. However, there is no official guidance in Croatia regarding the VAT treatment of e-gambling activities and it is advised that such treatment is analysed on a case by case basis. There are no specific guidance in the Croatian legislation regarding the VAT treatment of bonus points/credits earned as part of e-gambling activities and such treatment should be analysed on a case by case basis.  Article 40 (1i) of the Croatian VAT Act and Article 72 of the Croatian VAT Bylaw  Cyprus Supplies of lotteries, betting (including horse races or football matches) and other gambling activities are VAT exempt supplies. For purposes of neutrality, the exemption applies even if these bets are supplied electronically.  Paragraph 5 of Table B of the Seventh Schedule of the Cypriot VAT Law Czech Republic In the Czech Republic, the operating of lotteries and other similar gambling activities (whether provided in store or online) according to the Czech Republic Act No 202/1990 Coll. regarding lotteries and other similar games is VAT exempt with no right of input VAT recovery.In the Czech Republic, winnings such as bonus points or credits earned as part of gambling activities are not subject to VAT. Section 60 of the Czech VAT Act  Denmark  In Denmark, e-gambling activities – that is the supply of a game of chance for money – are exempt. Bonus points and credits earned as part of gambling activities are not subject to VAT in Denmark. Article 13, stk. 1, no. 12 of the Danish VAT Act  Estonia In Estonia, online gambling and similar activities – including bonus points or additional credits earned in the context of gambling activities – are exempt from VAT. Article 16(2) para 7 of the Estonian VAT Act Finland In Finland, the organizing and dealing with lottery activities is VAT exempt. However, there is no clear guidance in Finland regarding the scope of VAT exempt gambling activities. Article 59 2k of the Finnish VAT Act France  The receipts flowing from bets on sporting events and online game of chance/gambling, are VAT-exempt as far as such services are subject in France to a progressive tax on gambling services provided by casinos (“prélèvement sur le produit des jeux dans les casinos”) or to the tax on spectacles, games and entertainment (“impôt sur les spectacles, jeux et divertissements”).  Although there is no specific guidance in the French legislation the exemption should apply to e-gambling provided that the relevant criteria are met.The VAT-exemption is not applicable to the fees received by organizers and disclosed intermediaries of such gambling events, which are therefore subject to VAT. More specifically, the VAT-exemption is not applicable to intermediaries acting in the name and on behalf of third parties. Intermediaries acting in their own name may benefit from the VAT exemption.There is no specific guidance in the French legislation regarding the VAT treatment of bonus points/credits earned as part of e-gambling activities and such treatment should be analysed on a case by case basis. Article 261 E 2°. of the French VAT Act Germany In Germany, activities that are subject to the German Race Betting and Lottery Act (in particular horse racing, lotteries and sport bets) are VAT exempt. The VAT exemption also applies where the lottery or bets are arranged online.However, gambling / betting is strictly regulated in Germany and the right to provide such services under the Race Betting and Lottery Act is granted on a case by case basis. In case the VAT exemption does not apply, the VAT is due on the full amount paid by the gambler, which excludes bonus points or credits earned as part of e-gambling activities.  Section 4 number 9 of the German VAT Act Greece Gambling activities are included in the indicative list of the electronically supplied services and therefore are treated as such and are subject to the standard Greek VAT rate. e-Gambling activities can be exempted from VAT with no right to deduct input VAT, as long as they are performed by bodies, regulated by the Gambling Committee, in accordance with the Greek Act on Gambling.There is no written guidance in Greece as regards the VAT treatment of bonus points/credits earned in relation to e-gambling activities.  Annex VII and Article 21 para 1 of the Greek VAT Act L.2859/2000 and art. 22 of the Greek VAT Act  Hungary Gambling activities provided either online or in lottery stores (including bets) are exempt from VAT with no right to input VAT deduction. In order to provide online gambling services covered by the Act on Gambling activities – as it is a non-liberalised activity. A provider must have a concessions right and have an authorisation from the National Tax and Customs Administration (NTCA). According to the above cited rules, if an online gambling operator established in Hungary or abroad provides online gambling services covered by Section 2 paragraph (2a) of the Act on Gambling activities to customers established in Hungary without authorisation of the NTCA, this activity shall be regarded as illegal even if the operator holds a valid online gambling operation licence issued by another State. Section 86 of the Hungarian VAT Act  Ireland Betting is an exempt activity where the outcome of an event (horse race, dog race, football match and national lottery numbers) is unknown with the odds being set by a bookmaker.This exemption extends to online betting. Gaming is taxable at the standard rate.  “Gaming” means playing a game, whether of skill or chance or partly of skills and partly of chance, for stakes hazarded by the players (e.g. roulette, bingo, blackjack etc.) which contrasts with bets on the outcome of sports events.  The supply of such games of chance delivered over a network or an electronic interface (“eGaming”) is taxable in Ireland at the standard rate of VAT.   The net revenue actually received by the eGaming operator is taxable. Bonuses, free plays and other promotional discounts as part of eGaming activities are excluded from any calculation of the consideration on which VAT is due.  Further information on eGaming may be found in Revenue eBrief 104/14 (http://www.revenue.ie/en/practitioner/ebrief/archive/2014/no-1042014.html)and eBrief 18/15 (http://www.revenue.ie/en/practitioner/ebrief/archive/2015/no-182015.html). Schedule (1), part 2, para 10 of the Irish Consolidation Act 2010 Italy In Italy, gambling activities are exempt with no right to input VAT deduction, there is no specific exemption for the supply of online gaming services but in practise these services are also treated as exempt with no input VAT deduction. There is no specific guidance in the Italian legislation regarding the VAT treatment of bonus points or credits earned as part of e-gambling activities. The Italian VAT Act Article 10  Latvia According to Latvian VAT Law, a VAT exemption is applicable to gambling and lottery related activities for taxpayers who have rights to create casinos’ and gambling halls and to organize lotteries.However, such exemption does not extend to gambling activity related services, such as goods and services supplies or catering entities and slot machine (adult or children) purchases and maintenance services.There is however no clear guidance in the Latvian legislation regarding the VAT treatment of e-gambling activities. Article 52 of the Latvian VAT Act and Cabinet Regulations No.17 Articles 49; 50; 51  Lithuania In Lithuania, Gambling and e-gambling activities that fall within the definition of ‘gambling’ activities in accordance with the Lithuanian Gambling Law (i.e. games or mutual betting in which the participant may win or lose money, and where the gain or loss depends on chance, the result of any event or a sport match) are exempt from VAT.The VAT treatment of bonus points/credits earned as part of e-gambling activities is not explicitly regulated in the Lithuanian VAT Law and the exact VAT treatment should be analysed on a case by case basis. Article 30 of the Lithuanian VAT Law Luxembourg Gambling activities falling within the scope of electronic services do not (in principle) qualify for a VAT exemption. Article 44(1)(j) of national VAT law Netherlands Gambling services are an exempt supply for VAT purposes with no right to deduct input VAT. The definition of gambling services is outlined in the Dutch Gambling Tax Act and those services include all activities with an element of chance which cannot be influenced by the participants (i.e. prize contests, lotteries, slot machines, etc.). Although, there is no clear guidance in the Dutch legislation, the exemption should in principle apply to e-gambling activities. It is however recommended that the exact VAT treatment is analysed on a case by case basis.There is no specific guidance in the Netherlands with regards to the VAT treatment of bonus points / credits granted as part of e-gambling activities since these activities are, in principle, VAT exempt.   Article 11.1 (l) of the Dutch VAT Act and the Dutch Gambling Tax Act  Poland  Under  the Polish VAT Law games of chance, mutual betting, games on machines and games on low-prize machines, which are subject to gaming tax are VAT exempt. Note that, in Poland, organising gambling activities without authorisation from the Minister of Finance and participation in such gambling activities via the internet is forbidden and subject to penalties. Article 43, section 1, point 15 of the Polish VAT Act  Portugal In Portugal, the lottery of the Holy House of Mercy (Santa Casa da Misericórdia), the mutual bets, bingo, sweepstakes and instant lotteries duly authorized, as well as respective commissions, and all activities subject to the special Portuguese gaming taxes are exempt from Portuguese VAT. Please note that under the Game Act (Decree-Law 114/2011 of 30 November) the right to operate games of chance in Portugal is reserved to the State and can only be exercised by those to whom the Government awards the respective concession by an administrative contract. Moreover, according to the Portuguese internal legislation, the right to operate on-line games in Portugal only belongs to the Holy House of Mercy. Taking this into account we consider that it is unlikely that this VAT exemption applies with respect to online transactions carried out under the MOSS. However, please note that there are no guidelines in this regard.In Portugal, bonus points/credits earned as part as e-gambling activities should be excluded from the taxable basis for VAT purposes. This is based on the general treatment applicable under for bonus and credit points. There is however no specific guidance applicable with respect to e-gambling activities and it is recommended that the exact VAT treatment is analysed on a case by case basis.  Article 9 (31) of the Portuguese VAT Law  Romania Gambling activities performed by authorised entities irrespective of whether facilitated online or in store are VAT exempt operations.  Article 141, para. (2), letter. c) of the Romanian VAT Law  Slovenia According to the Slovenian VAT legislation games of chance are exempt from VAT (this also includes games of chance provided online). Games of chance are not specifically defined in the Slovenian VAT legislation. They are defined in the Gaming Act as games where participants against a payment of a specific amount have equal chances to win the prize and the outcome of the game exclusively or mainly depends on chance or other uncertain event. Although there is no specific guidance in the Slovenian legislation, e-gambling should also qualify for the above exemption. There is no clear guidance in the Slovenian legislation regarding the VAT treatment of bonus points/credits earned as part of e-gambling activities and it is recommended that the exact VAT treatment is analysed on a case by case basis Article 44 point 6 of VATA-1 Slovakia Operating lotteries and similar games by company operating under a specific legislation (Act on lottery and other similar games) are VAT exempt services with no right to input VAT deduction. No mention about online gaming services is included in the legislation. Generally, if online gaming services are performed by a company operating under the specific legislation and closely related to lotteries and similar games, such services should also be VAT exempt.  Article 41 of the Slovakian VAT legislation Spain

In Spain, lotteries, betting and gambling activities are VAT exempt if:

-organized by Public National lottery operators;

-organized by Public bodies of the Spanish Autonomous Community and;

-organized by Authorized Gambling operators the gambling activities of which are subject to Spanish Gambling Tax, which includes authorized operators that organizes gambling activities, raffles, betting, occasional gambling, cross-border gambling, random combinations games for marketing or promotional purposes.In principle, e-gambling activities are subject to Spanish Gambling Tax in Spain therefore should be VAT exempt in Spain. However it is advised that the exact VAT treatment is analysed on a case by case basis. There is no clear guidance in the Spanish legislation regarding the VAT Treatment of Bonus Points/Credits granted as part of e-Gambling Activities and such treatment should be analysed on a case by case basis.

Article 41 of the Slovakian VAT legislation Sweden Generally, in Sweden, gambling services are exempt supplies for VAT purposes with no right of input VAT deduction. The Swedish VAT Act states that lotteries, betting and other types of similar games are exempt from VAT and such exemption should, in principle, apply to e-gambling activities.There is no clear guidance in the Swedish legislation regarding the VAT treatment of bonus points or credits earned as part of gambling activities. This is considering that such activities are generally exempt from VAT.Recreation games such as flipper games, car games and other games which do not include a chance to win a prize or the only prize is additional game time are subject to VAT.  Chapter 3, para. 23, subpara. 5 of the Swedish VAT Act United Kingdom

Generally, “game of chance” services, whether facilitated online or in store, are exempt supplies for VAT purposes with no right to input VAT deduction. A game of chance is generally understood in the UK as either a game of:

-pure chance, such as dice or roulette, where the result cannot be influenced by the player, or

-chance and skill combined, such as whist or rubber bridge, where the player either cannot eliminate chance or can only do so by exercising superlative skill.Bonus points/credits granted as part of e-gambling activities are not a supply for VAT purposes so no VAT is due on these amounts (although gaming duties may apply depending on the type of product).

Schedule 9 Group 4 of the UK VAT Act. Further information can be found in Notice 701/29 ‘Betting, gaming and lotteries’. [Please note that there may be a liability to register for Remote Gaming Duty – see Notice 455A for further details.]