Currently, authorities of several European countries are reviewing the existing gambling rules and regulations with the aim of changing the outdated ones and making them as compatible to the fast developing gambling sector as possible.
Along with implementing changes in the laws, those countries that are members of the European Union will be supposed to stick to the rules established by the regulators and implement VAT changes as well.
In other words, every online gambling operator, which wants to legally provide gambling products and services throughout the countries of EU, will be required to obey the new rules, concerning the tax on electronic services.
Up to now, gambling providers were capable of “escaping the law” by choosing to provide their services in countries where VAT was lower. VAT-free countries were also preferred by gambling operators.
However, January 1st 2015 is the date when things will change and providers will be obliged to pay VAT depending on the country they provide their services at, rather than on the country their headquarters are based in.
Every European country has its own VAT laws. While in some countries authorities apply tax on every gaming service, some other have a VAT-exception policy.
Although the intention of EU authorities is to make the laws favorable to both – players and operators, the upcoming changes are expected to create howls of protest because the tax operators will be supposed to pay will predominantly depend on the country their players are based at.
However, several market analysts raised the question about the impact the new VAT changes will have on players. At first glance, it seems like gambling operators will be the ones affected by the changes and to a certain extent, that’s right.
Yet, analysts hurried up to remind that PokerStars has recently applied changes in the rake increase and limited the promotional offers it used to provide its players with. Understandably, they asked if the rake increase has anything to do with the VAT changes.
Luckily, there are some European countries that will not experience the severe effect of the VAT changes and the UK is one of them. Gambling operators may be rest assured that no tax increase is expected since the UK has the tax exemption policy, mentioned above.
Nevertheless, the UK based providers will be supposed to pay the so called point-of-consumption tax that was implemented a month ago.
Countries such as France, Germany, Ireland have their own rules, concerning VAT. Authorities apply different calculating methods, depending on the type of game provided. They divide the games into two categories – those that require special skills and those that need the player to be just lucky. German regulators have adopted another approach as well – they apply VAT to poker games while sport betting activities are exempt.
