Belgium's Constitutional Court has annulled legislation which extended value-added tax to the supply of online gaming and gambling services to customers in Belgium.
The landmark decision was issued on March 22 in response to a legal challenge to the legislative change brought by Swedish-listed online gambling group Kindred (formerly Unibet).
Legislation to remove the broad-based VAT exemption on the gambling sector in Belgium entered into force on August 1, 2016. As a result of the change, all gambling and games of chance that take place online are subject to VAT at the standard rate of 21 percent. However, lotteries and land-based gambling remained VAT-exempt.
Kindred put forward arguments that the decision was incompatible with both Belgium's gaming laws and value-added tax law, as it discriminated against online operators and in favor of lotteries and land-based casinos.
"The ruling points out the inherent incompatibility between consumer protection and tax revenue objectives, especially when products (lotteries v. other products) and channels (retail v. online) are treated differently," the company said after the ruling.