EuBingo - News centre

You are here: » Home » News centre

News centre

European Court of Justice rules on German VAT case

Category: EU Updates

On 9 June, the European Court of Justice (ECJ) released its judgment regarding gaming hall operator Leo-Libera GmbH and the application of VAT on gaming machines in Germany. Upholding the opinion of Advocate-General Yves Bot, the Court ruled that the German law allowing for the application of VAT on gaming machines was in compliance with EU rules. Article 135(1)(i) of Council Directive 2006/112/EC of 28 November 2006 states that Member States can exempt from VAT “betting, lotteries and other forms of gambling,” and the Court reaffirmed the authority of Member States to make broad determinations as to the conditions and limitations of VAT exemptions on “other forms of gambling.”

The case was referred to the ECJ after gaming hall operator Leo-Libera GmbH argued that under Article 153(1)(i) Member States could not exempt only betting and lotteries but must also exempt all other forms of gambling. The Court found fault with this interpretation as betting and lotteries are given exemptions from VAT because such services do not allow for a taxable person. Although many gambling transactions create difficulties for VAT applications, the Court considered it necessary that exemptions from VAT must be for a minor proportion of the gambling services authorised by the State.

Additionally, Leo-Libera had argued that the principle of fiscal neutrality was violated by the application of VAT to a limited number of services. However, the Court rejected this argument and held that gambling services which are in competition with each other must not be treated differently for VAT purposes. The ECJ further stated that if two forms of gambling are not in competition with one another, one can be exempt from VAT while the other is not since Member States retain the discretionary power to decide on the applications of VAT.

Return

^ Top

Next page: Become a member