You must register and pay the racing betting, lottery or sports betting tax if you
- operate a totalizator for placing bets on racehorses or are active as a bookmaker
- organize public lotteries and draws
- organize sports betting
In the run-up to a horse race, the totalizer continuously calculates the odds from all bets up to the start of the race. The participants bet among themselves and not against a bookmaker.
How are race bets taxed?
- Racing bets are subject to racing tax:
- Horse racing at a totalizator and
- bets placed with a bookmaker.
- You must pay a tax of 5.3% of the stake on the race bets placed.
- Your tax liability as a totalizer or bookmaker arises when the bet is placed, i.e. at the moment the player pays the stake.
How are lotteries taxed?
- Public lotteries and draws organized in Germany are subject to lottery tax.
- The tax amounts to 20% of the entry fee minus the lottery tax. The participation fee is made up of
- the ticket price paid by the player to participate in the lottery or draw
- plus any fees set by the organizer.
- Public lotteries and draws are exempt from taxation
- where the total amount of the participation fees paid does not exceed the value of EUR 1,000 or
- for exclusively charitable, benevolent or ecclesiastical purposes where the total amount of the participation fees paid does not exceed the value of EUR 40,000 and the net proceeds are used for the aforementioned purposes
- If an approved lottery or draw is exempt from lottery tax, the turnover from the sale of tickets is generally subject to VAT. The tax liability arises for public lotteries and draws at the time when the player pays the participation fee.
How are sports bets taxed?
- Sports bets from domestic and foreign providers that are organized in Germany or where the players are resident in Germany are subject to sports betting tax.
- All sports bets placed in Germany are taxed at 5.3% of the stake. Sports bets placed via the Internet are also taxed.
- In the case of sports betting, the tax liability arises when the bet is placed, i.e. at the moment the player pays the stake.
- If you organize sports betting and you are not resident or domiciled in the European Union (EU) or a contracting state of the European Economic Area (EEA), you must appoint a tax representative in Germany.
- A tax representative can be someone who
- has their place of residence or business in Germany,
- is reliable in dealing with tax obligations and
- keeps proper business records and prepares annual financial statements in good time, provided there is an obligation to keep accounts.
- The person appointed for tax purposes must fulfil their obligations as an organizer. The authorized person has the same rights and obligations as the organizer of the sports bet. The tax for sports betting is owed jointly by the authorized person and the organizer of the sports bet.
If you operate a totalizator or work as a bookmaker, or organize public lotteries and draws or sports betting, you must register and pay the racing betting, lottery or sports betting tax. The racing betting tax applies to bets placed on the occasion of horse races at a totalizator or with a bookmaker. A tax of 5% of the stake is payable on the bets placed. Lottery tax is levied on public lotteries and draws organized in Switzerland. In the case of domestic public lotteries and draws, the tax amounts to 20% of the gross price of all tickets.
The following are exempt from taxation
- Raffles a) in which tickets are not issued or b) in which the total price of the tickets in a raffle does not exceed the value of EUR 650, unless the organizer is a trader or travelling salesman within the meaning of trade law or the winnings are wholly or partly in cash;
- lotteries and draws approved by the competent authorities where the total price of the tickets in a lottery or draw a) in the case of lotteries and draws for exclusively charitable, benevolent or ecclesiastical purposes does not exceed the value of EUR 40,000, b) in all other cases the value of EUR 240.
In the case of lotteries and gambling, the tax liability arises with the approval, but at the latest at the time when the approval should have been obtained. Sports bets from domestic and foreign providers that are organized in Germany or where the player is resident in Germany are subject to sports betting tax. All sports bets placed in Germany are taxed at 5% of the stake. Tax is also levied on sports bets placed via the Internet. The tax liability for sports bets arises when the bet has become binding. As a sports betting organizer, you can appoint a tax representative in Germany if you are not resident or domiciled in the EU or a contracting state of the EEA. A tax representative can be anyone who has their registered office in Germany, against whose tax reliability there are no reservations and who - insofar as they are obliged to do so under the German Commercial Code or the German Fiscal Code - keeps proper commercial accounts and prepares annual financial statements in good time. The tax representative must fulfill your obligations as a foreign-based organizer under this law as your own. He has the same rights and obligations as you. The tax representative is liable for the sports betting tax alongside the organizer.