VAT Question

[Triple7]

Normally I would but this country can be complicated when it comes to accounts, however will run it by another gestoria see what they think, it's not a big deal as most of my biz is outside of Europe but even still I might be able to claim something back.

It's almost always possible to get some things back when you buy things within the EU, which is likely the thing if you're resided there. Spain is like South America, Romania or some cheaper offshore locations. It's a disaster sometimes to get things done when you don't know the right people or your account isn't interesting ($$$$$$) enough for your accountant, banker, etc.

An affiliate company making around $ 100.000 isn't a big deal for them. So they're not going to work their ass off for you. Also bureaucracy and mentality in some of that countries is way different than in the West.

[Deano99]

I'm an accountant by trade and VAT can get a little tricky within the EU. It's true that when you invoice another VAT registered entity in the EU then you can reverse charge and zero rate the VAT, if you quote their VAT number on the invoice.

Presumably you would all be invoicing betting companies? Most will have a VAT number if they are large and active in the EU so the zero rated VAT treatment should work.

@wonderpunter, the confusion for your Spanish accountant might arise from the fact that most betting companies are not carrying on a vatable trade, ie. income from sports betting is exempt from VAT in most cases. This means that in theory you might not be invoicing a VAT registered company, in which case you will have to charge Spanish VAT as normal - I’m not saying that is the case, but it might form the basis of your accountant’s thinking.

It does open up the wider question however, how should revenue share be treated for VAT purposes in the hands of the affiliates? Does it constitute a vatable activity? Or should that depend on the type of betting the income relates to?

If the latter then it seems as though the rules are slightly different in the UK & Ireland. In Ireland, lotteries and betting on horses/sports…etc are VAT exempt, while takings from casinos are subject to VAT at the standard rate (23%). I assume this VAT treatment would apply to online casino’s as well.

In the UK it seems as though the VAT exemption extends to casinos, but the duties paid on gambling over there more than make up for that.

Useful links on UK and Ireland below;

Ireland: http://www.revenue.ie/en/practitione...no-762010.html

UK: http://www.hmrc.gov.uk/manuals/vband...bandg01300.htm

If the revenue share is to be treated differently according to the type of betting it relates to, are there then duties and excises due on the affiliate’s income? Presumably these duties are paid by the bookmaker on the gross income before the revenue share is paid out, but I wouldn’t be surprised if this treatment is abused slightly within the books of these corporations. And if the duties are in fact owed by the affiliates, then surely they will need a betting licence to operate??

I realise that I’m the accountant here, yet I have managed to ask more questions than I have answered. Truth is this all baffles the hell out of me, but it’s a relief to know that I don’t need to pretend to know all the answers in here, unlike my 9-5 existence.

[RacingJim]

As affiliates we are not offering gambling activites on our site, we are middlemen, online advertisers not licensed for gambling activities. Any tax on the gambling side of things will be taken care of by the gambling companies - if it isn't, that's not our responsibility anyway.

[justbookies]

As affiliates we are not offering gambling activites on our site, we are middlemen, online advertisers not licensed for gambling activities. Any tax on the gambling side of things will be taken care of by the gambling companies - if it isn't, that's not our responsibility anyway.

Exactly. I realise PremShip is an accountant but, with respect, you have it confused. We are only marketing companies. We invoice for marketing activity and nothing else. The fact the companies are betting companies is irrelevant. The relevant thing is where the companies are based. If Gibraltar or Caribbean, for example, then it is 'outside scope' because those territories are not part of EU VAT scheme. If UK then VAT will apply (if affiliate is also UK based and VAT registered). If Malta then it is 'reverse charge' . . . etc. Just happens most of the operators are based in locations that are not part of EU VAT, so most will be 'outside scope'.

[Deano99]

Of course, thanks for clearing that up.

But the fact that they are betting companies can be relevant, as they are quite often carrying out a VAT exempt activity. As a result there they might not be VAT registered, and if that is the case you can’t simply apply the reverse charge basis and zero rate the VAT. You would then have to charge VAT in the country in which you are VAT registered.

[Deano99]

Of course, thanks for clearing that up.

But the fact that they are betting companies can be relevant, as they are quite often carrying out a VAT exempt activity. As a result they might not be VAT registered, and if that is the case you can’t simply apply the reverse charge basis and zero rate the VAT. You would then have to charge VAT in the country in which you are VAT registered.

[justbookies]

Of course, thanks for clearing that up.

But the fact that they are betting companies can be relevant, as they are quite often carrying out a VAT exempt activity. As a result they might not be VAT registered, and if that is the case you can’t simply apply the reverse charge basis and zero rate the VAT. You would then have to charge VAT in the country in which you are VAT registered.

I understand the point you make exactly - that because they are trading in a VAT exempt environment for their 'sales' (ie: betting turnover), they are less likely to be VAT registered as well on the marketing side of things. In reality though, every single operator that I have ever dealt with that has any product located within the EU VAT system, is registered for VAT on their 'marketing' side of things for that product. That said, I only promote the biggest operators, most of whom are Plcs or the major independents, and I don't touch new operators.

[freebetsfreetips]

Not sure if I should add to this or start a new thread but we're a UK company nearing the threshold. As I understand it income from certain countries doesn't count towards the UK VAT threshold of 82k. Gibraltar is one example relevant but which of the major UK sportsbooks are classed as Gib or other non-Vat destinations and do they look at where the company is registered or where it's based or where the payment comes from or what?

Cheers,
Bob

[Deano99]

I'm based in Ireland so I am only sure about the law here, but vat is very much an EU tax and most rules apply in the same way for each member state.

So assuming it is the same in the UK as in Ireland - you can exclude all vat exempt sales when calculating your income for the purposes of the registration threshold. You should add together all UK income that would be considered "vatable", and also any such income that you bill to companies in the EU. Anything billed to countries outside the EU can be excluded, as this is considered vat exempt, or "outside the scope" of UK vat.

In working out where a company is based you should ask them before billing. If you are UK vat registered you will need to do that anyway, because if they are established in the EU and are vat registered you will need to get their vat number from them and quote it on your invoice, in order to zero rate the vat.

Obtaining the EU vat number is quite important as once you zero rate the vat on one invoice you become obliged to file an ESL return with HMRC, where you must give details of these zero rated sales. Here’s a link for info: https://www.gov.uk/guidance/vat-how-...-your-eu-sales

If the company is set-up outside of the EU they will not have a relevant vat number and there is no need to mention vat anywhere on the invoice to them.

[freebetsfreetips]

Can you confirm a few that are non-EU? Betfred/Tote, 888/Cassava - that correct? Any others?

[Deano99]

off the top of my head I know that Bet365 are based in the UK, and BetVictor are set up outside of the EU.

But it is worth remembering that even if a company is based outside of the EU they might have a UK branch that takes care of administration and costs - such as payments to affiliates. So you might be getting paid by a UK company without realising it. When you think about it this would make sense as the general aim of moving offices to outside of the EU is to shift profits into that low tax jurisdiction, while incurring the large tax deductible expenses from UK operations.

The only way you can be certain if a company is based outside of the EU is to ask them. If there is nobody you can ask then maybe check through your old invoices, bank remittances, letters, email correspondence...etc - anything that might include company details, address...etc on signatures and letterheads.

[Deano99]

and I should add - Google... to have a dig around