Tax on online gambling: Belgium may levy VAT, EU Court rules in favor
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26 Apr 2024 •
Reading time: 2 minutes Let’s look back to 2016 when the Belgian government decided that online gambling would no longer exempt from value added taxes. The operators were already paying gaming tax at that time. From this moment on online gambling providers will have to pay VAT on turnover generated from games.
The European Court of Justice on April 25 decided that the abolition of this exemption in 2016, did not violate the principle of neutrality to tax online gambling differently than offline gambling.
Casino de Spa demanded a refund of VAT
Casino de Spa did not agree with the decision and demanded a refund of € 15.5 million in VAT that it had already paid. After it argued that it was unfair that online gambling was taxed. While offline games of chance such as lotteries were still being exempt from VAT.
Advocate General supported Belgian decision
However Advocate General Juliane Kokott of the EU Court ruled that Belgium had not acted contrary to EU law. According to Kokott it is not a violation of the principle of neutrality to tax online and offline gambling differently. The Advocate General also pointed out that Casino de Spa cannot rely on the VAT exemption for other companies to avoid paying VAT.
EU Court follows Advocate General
The EU Court followed the Advocate General’s conclusion in its judgment. This means that Belgium may definitively abolish the VAT exemption for online gambling.
“There is no violation of the principle of neutrality when a distinction is made between money games that are offered by electronic means and those that are not. The argument that the exemption of other companies can be considered state aid could benefit Casino de Spa. The casino cannot in principle avoid paying VAT by claiming that the exemption enjoyed by other companies is considered state aid.”
Juliane Kokott, Advocate General