As of 1st July 2016, Belgium changed the VAT applicable to the games of chance and money online by restricting the exemption of tax. This was aimed, among other things, on online sporting races bets, soccer tournaments forecasts and poker games.
NEW VAT SYSTEM:
The legislator gives the definitions of “Games of chance or money” and of “lottery”.
• Games of chance or money:
– The games, under whatever denomination it is, which gets the chance to gain prices or bonuses in money or in kind, and on the occasion of which 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 the fate or any other randomly circumstance;
– Games, under whatever denomination it is, which gets to the participants in a competition of whatever nature it is, 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 organizer 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 randomly 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:
– 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 proposing, to 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.
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 organizers of these online games must be registered with the Belgian VAT administration.