VAT treatment of online gambling services
Last 31 March 2015, in order to clarify the VAT treatment of online gambling services, the VAT Committee of the European Commission has published the attached document, detailing the main aspects to take into account from a VAT perspective (place of supply, MOSS regime, VAT exemption, taxable base…).
Online gambling services, including betting, are qualified as electronically supplied services. Furthermore, from 1st January 2015 services supplied electronically that were previously subject to VAT in the Member State where the supplier is established, have become taxable in the Member State where the client resides when supplied to non-taxable persons within the EU.
That implies that suppliers of those services have shifted from having to present their VAT returns and fulfil any other obligation according to the rules of the Member State where they are established to present their VAT returns and fulfil the obligations of any of the Member States to which they are supplying services. At this point, it is important to mention that the companies under this situation could apply for the simplification scheme “Mini One Stop Shop (MOSS)” in order to make easier their VAT obligations.
Finally, we would like to mention that each EU Member State, through its local VAT Law, are able to apply a VAT exemption to these services under the limit of the respect of the principle of neutrality. This is the case of Spain, due to the fact that article 20.On.19th of the Spanish VAT Law 37/1992, establishes the VAT exemption for activities that constitute taxable events of taxes on gambling.