Dutch Professional Poker players to get tax refund

As the Dutch Finance Authorities have stated recently, professional poker players can, under particular circumstances, get the already paid gambling tax back. In total, the tax which will be refunded back, will be in the million figures. However there is a hitch: Only tax for winnings which were gambled on the regulated platform PokerStars.eu can be refunded.

Those professional poker players from the Netherlands who won in the past years, can now request a tax refund. In the Netherlands, it is quite common, that professional players play around 30 % of their winnings in tax. Since the tax refund will be backdated going back to several, professional Poker players can now receive a total of several millions in tax refunds.

Dutch Tax rules vs. EU-law

A determining factor for this decision of the Dutch Tax Authorities, which at first glance looks fair, is a judgement of the Supreme Court. Way back in 2015 one had here discovered, that because of the current EU- Regulations, there can be no taxes levied on winnings from gambling, if the Registered Office of the operator is in the EU. In this case, there would be a breach of the EU- freedom to provide services.

The issue here is in the registered office of the well-known Poker-Platform. To apply the above mentioned regulation, the registered office of the platform must, as mentioned, be in the European Union. Ultimately, it was established, that the registered office of PokerStars has been situated in the European Mediterranean Island of Malta since 2012. However, the Dutch Tax Authorities have assumed that s PokerStars is located on the Isle of Man. This island is not part of the EU anymore.

Tax Authorities follow up voluntarily

Subsequently, the Dutch Tax Authorities requested from quite a few players, wrongly that they pay 30.1 % monthly tax on their poker winnings from PokerStars. Finally one was under the impression, that PokerStars has its registered office on the Isle of Man. Since the Authorities have now realised this, they want to amend this and refund on a voluntary basis, the “Poker tax“ of the past nine years since 2012). However this does not mean that this dispute is definitely solved. The Dutch courts have finally already established, that PokerStars has its registered office on the Isle of Man. It seems therefore, that with this approach, the Dutch Tax Office wants to protect itself from an expensive wave of complaints.

Tax Refund also on other Poker-Platforms?

The Dutch Tax Authorities expect to have to refund several million Euro in tax refunds to PokerStars-Players. However at the moment, there are no further refund claims. Those from the Netherlands, who for example have gambled on competitive provider platforms such as partypoker or 888poker must continue to pay the 30 per cent tax and will not receive a tax refund. This is because both other providers have their registered office in the United Kingdom and therefore are since Brexit has been implemented not part of the European Union. 

Dutch Gambling Regulations will be reformed

Similar to Germany, the Netherlands has also decided, to implement a new Online-Gambling-Act called “Wet Kansspelen op Afstand“. Therefore the Gambling Act, which is not contemporary anymore and which was adopted in the 1960s, will be reformed, presumably on the 1st. April 2021.

As from this date onwards, it will be possible for all online gambling providers to apply for a Dutch Licence. The operators here will be the ones to pay the tax and not the gamblers. This should be the case not only for Poker, but also for other types of Online-Gambling.

Conclusion

To do away with a flow of complaints from the Dutch gamblers, the local Tax Authority is voluntarily offering a refund on taxes paid for winnings from gambling. To be eligible, the player guest must have generated his winnings on PokerStars.eu and must actively request the amount. It is still not clear, how many players are affected by this, but industry experts are assuming, that there will be refunds in several million Euro, since the refund can be backdated till 2012.

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