PokerStars Winnings Not Liable to Tax, Dutch Court Rules

PokerStars Winnings Not Liable to Tax, Dutch Court Rules

Online poker players in Netherlands will be happy to know that a Dutch Court has ruled that players who play and win on PokerStars.eu should not be taxed.

This is the ruling by the Court of Appeals in Den Bosch which means that local gamblers who earned winnings through the Malta-licensed PokerStars site are temporarily off the hook.

For years, the Dutch tax office (Belastingdienst) held that local players were subject to a 29 percent tax on their winnings on PokerStars.eu. Speaking on behalf of the 100 players involved in the case, lawyer Pepjin le Heux said some of his clients would have to pay accumulated taxes going as high as €500,000 if Belastingdienst’s claims were upheld.

The two parties disputed on the location where the winnings were held and where the random generator was based. Dutch players argued that they should not be required to pay taxes in accordance with European Union (EU) rules which state that gambling winnings obtained from EU countries are not liable to taxation. PokerStars.eu was granted license in Malta – an EU member state.

However, Belastingdienst insisted that Rational Group, PokerStars’ parent company, was based on the Isle of Man – an independent jurisdiction that is not part of the EU. In its judgement, the Den Bosch court said that the company licensed in Malta is the rightful holder of PokerStars.eu’s online gambling offerings and therefore players should not have any obligation to pay taxes to the local tax office. Belastingdienst was ordered to pay €4,233 in legal costs as part of the ruling.

Appeal Could Be Filed In Supreme Court

The judgment is not yet final though, as lawyers representing Belastingdienst contemplate on whether or not to appeal the ruling to the Netherlands Supreme Court. They still have six weeks to make a decision.

The court issued the ruling on December 31, but the decision was only made public a week later. Having lost its claim to impose tax on PokerStars.eu players, Belastingdienst will now have to issue refunds to those who already paid their taxes. The tax refunds for Belastingdienst could reach millions of euros.

The Netherlands is reportedly looking to introduce a locally-licensed online gambling regime. It will not take long before the plan is implemented as the government is reported to be in the final stage of the process.

The Remote Gaming Bill, which was approved by the lower house two years ago, will be debated by the Dutch senate on February 5.

Senators could vote on the bill on February 12. If the bill pushes through, the Netherlands will finally have a liberalized online gambling market – a plan that has stayed dormant for years.