The Belgian parliament has recently passed a bill that will force online betting and casino sites to pay 21 percent value-added tax (VAT), a controversial move that may potentially result in challenges from the gambling industry and regional government. This VAT requirement is set to take effect on the 1st of August 2016.
The text of the bill has yet to be published, but it is expected to be announced shortly, according to the Belgian Federal Public Service.
The passage of the bill has come despite criticism from the Council of State, which advises the executive branch and is part of the the Belgian Supreme Administrative Court. The Council questioned whether the new provisions would be in line with the principle of proportionality and whether they would violate the balance of power between the regional and federal government.
The Walloon government – one of the six main governments in Belgium, and the Belgian Casino Federation have opposed the bill, highlighting that it is part of a package to raise funds in order to close a budget gap caused by the increase of spending in defence against terrorism. Also, the bill does not apply to the national lottery, thus raising questions of state aid and the difference in the treatment of online and offline gambling. Additionally, the bill could pose a threat to jobs in the region.
Even though the VAT imposition would not directly apply to land-based casinos, casino operators have opposed the bill since they depend on their online and mobile operations in order to increase their revenue. The Belgian gaming industry had lost money for four to five consecutive years until the online gambling sector gave the industry a forward push.
Land-based operators currently pay around 40% of their gross gaming revenue in tax, while online gambling companies now pay around 11%.
