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.