VAT and Gambling

1) Picture of the world: when VAT is and when it is not

B2C gaming services (casinos/sports) in many jurisdictions are exempt from VAT or considered out of scope: the operator does not charge VAT on bets/winnings.
B2B services (content/engine licensing, hosting, anti-fraud, KYC, advertising, analytics) - usually subject to place-of-supply rules and/or through reverse charge at the recipient.
Consequence of exemption: input VAT on related expenses often leads to non-reimbursement in full or pro rata (partial exemption).

2) Basic concepts of VAT for iGaming

Place of Supply - Specifies in which country VAT is to be considered.
Reverse Charge: In a B2B crossboard, the recipient charges VAT instead of the supplier.
Tax Point: usually by shipment/service or prepayment (important for recurring B2B services).
Input VAT: VAT paid on purchases; on B2C exemption - often not deductible.
Partial Exemption: a methodology for the proportion of deduction if the company has both taxable and exempt transactions.

3) Place-of-supply: short and practical

3. 1 B2C

Gaming services: usually exemption/out of the sphere - without VAT to the individual client.
B2C digital add-on services (not the game itself): rules vary - check local norms (e.g. paid notifications, merch, content subscriptions).

3. 2 B2B

General services (advertising, SaaS, analytics, licensed royalties): more often the recipient's place → reverse charge on the side of the client-company.
Exceptions (real-property, events at the venue, etc.) for iGaming are usually irrelevant, but check private cases (offline tournaments, live casino studios).

4) B2C liberation and its effects

Bet/play income excluding VAT → non-refundable input VAT on related costs (often marketing, hosting, content providers).
Partial elimination is used: the proportion of deduction is calculated according to the approved method (for example, the share of taxable turnover in the total turnover).

5) Mixed deliveries: games ≠ everything else

Composite delivery: one economic sense (packaged product) → a single VAT regime.
Separate deliveries: different, independent services (gaming B2C-exempt + taxable advertising/subscription/API access).
Recommendation: contractually and operationally separate gaming services and taxable B2B services (individual invoices, acts, showcases, tracking).

6) Vouchers, freespins, bonuses and "implementation cost"

Single-purpose vouchers (SPVs): The VAT rate is known at issue - the tax point may arise when the voucher is sold.
Multipurpose vouchers (MPV): VAT - on redemption.
Freespins/Free Bets: Do not confuse face value and implementation cost. In VAT accounting, fix the policy: when the bonus decreases the base (if allowed) and how it is estimated (EV/actual).
Cashback/promotional codes: distinguish between a discount (reduces the base of the taxable service) and a marketing payment (separate nature).

7) Jackpots and VAT

Jackpot pool contributions generally do not form a taxable VAT base;

Paying a jackpot to a player is not an object of VAT (cash payment), but affects GGR and therefore the proportion of the deduction.

8) Partnerships/affiliations

B2B advertising/attraction: as a rule, reverse charge at the operator (place-of-supply - operator's country).
Record in contracts: counterparty status (business/non-business), VAT-ID, wording about reverse charge, reporting (acts/invoices).

9) B2B providers: content, hosting, anti-fraud, KYC

Royalties for IP and SaaS/hosting are usually the client's place → reverse charge from the recipient.
If registration of a non-resident in the client's country is mandatory (threshold/special rules) - take this into account in the registration plan-card.

10) Accounting: tax base, moment, documents

Tax point: for the provision of a service/periodic billing, or by prepayment (if such is the rule).
Invoices: for reverse charge - mandatory notes ("VAT is charged by the recipient," reference to the norm), the correct customer details.
Exchange rate differences: use the official rate/NB rate at the tax point date to convert the base.

11) Partial Exemption

Calculate the deduction factor according to the agreed method (e.g. share of taxable B2B services in the total turnover).
Annual adjustment: recalculation of the proportion for the year and adjustment of the input VAT deduction.
Keep a register of mixed expenses (traffic, hosting, software) and clear attribution rules.

12) Calculation examples

12. 1 Operator (month)

B2C game income (exempt): 5,000,000

B2B income (taxable, customer location, reverse charge at customer): 200,000

Input VAT on mixed expenses: 50,000

Deduction ratio = 200,000/( 5,000,000 + 200,000) ≈ 3.85%

→ Allowable input VAT deduction ≈ 1,925, the rest to expenses.

12. 2 B2B provider (SaaS → non-resident operator)

Invoice: 100,000 (excluding VAT), reverse charge.
VAT is charged by the client at home; The supplier reflects the service export/non-analysis. in its reporting (according to local rules).

13) Policies and registers (YAML templates)

13. 1 VAT status register

yaml entity: "Gamble Hub Ops Ltd"
vat_registration:
country: "..."
vat_id: "..."
policy:
b2c_gaming: "exempt    out_of_scope"
b2b_services: "place_of_recipient_reverse_charge"
invoicing_note: "Reverse charge applies"
partial_exemption:
method: "turnover_ratio"
annual_adjustment: true owner: "Tax/Finance"

13. 2 Mixed Expense Register (for proportion)

yaml period: "2025-11"
mixed_inputs:
- vendor: "CloudHostX"
description: "compute+cdn"
input_vat: 12000 attribution: "pro_rata"
- vendor: "AdNet"
description: "acquisition traffic"
input_vat: 18000 attribution: "pro_rata"
ratio: 0. 0385 deductible_vat: 1155 nondeductible_vat: 28845

13. 3 Vouchers/Bonuses

yaml voucher_policy:
spv: "tax_at_issue"
mpv: "tax_at_redemption"
bonuses:
recognition: "upon_redemption"
valuation: "expected_value    actual"
accounting_link: "bonus_policy_v3. md"

13. 4 Invoice template (B2B, reverse charge)

yaml invoice:
number: "INV-2025-1105"
supplier_vat_id: "..."
customer_vat_id: "..."
description: "API access / SaaS, period 2025-10"
net_amount: 100000 vat: "reverse_charge"
note: "VAT to be accounted for by the customer under reverse charge"

14) RAG Risk Matrix

15) Checklists

Before launching/invoicing

• Service status defined (B2C gaming vs B2B).
• Place-of-supply and reverse charge mode are set.
• Checked customer VAT-ID and wording in contract.
• Checked if non-resident registration is required.
• Invoice/act templates updated.

Monthly cycle

• Calculation of deduction proportion and register of mixed expenses.
• Check tax point on subscriptions/prepayments.
• Monitor vouchers/bonuses (SPV/MPV, EV).
• Reconciliation of reverse charge reports on counterparties.

Annually

• Annual adjustment partial exemption.
• Revision of contracts and templates (VAT/RC wording).
• Update of the duty card (registration/thresholds).

16) Mini-FAQ

Are VAT rates applicable? Generally, B2C gaming services are exempt/out of scope; check local law.
Do I need to invoice VAT to a non-resident affiliate? Usually not: reverse charge at the recipient (B2B).
Can all input VAT be deducted? No, with released B2C operations - proportion/non-reimbursement.
How to count freespins for VAT? By implementation cost and your policy rules (EV/actual), not by face value.

17) Disclaimer

VAT regimes vary by country and change frequently. This material is the operational framework; Agree with local regulations and consultant before applying for a particular jurisdiction.

18) Conclusion

VAT in iGaming is a process architecture: correctly determine place-of-supply, consistently apply reverse charge, document partial expiration, manage vouchers/bonuses and maintain net separate accounting. Form policies, registers and templates - and the VAT block will become predictable and manageable.