Dutch government mulls ‘active’ operator tax from January 2021

The Dutch government’s lower house has approved a motion to tax all online gambling operators in the Dutch market from 1 January 2021. The motion, proposed by Dutch MP Edgar Mulder, was passed by 92 votes to 45. The bill will now pass to the upper house for additional debate and amendments. The recommendation calls on the government to “ensure that all online gambling providers operating in the Netherlands are subject to the Gambling Tax Act, whether they have a licence or not”. It acknowledges there are “several foreign providers” which are active in the Dutch market and operating without a licence, while paying no tax on turnover. The MP referenced Dutch Gambling Authority (KSA) estimates of a €90m-a-year black hole in uncollected tax revenue from operators, noting that taxing winnings derived from these sites is “not a realistic alternative”. However, the Dutch parliament faces an uphill battle to get this legislation through by the 1 January deadline, with MPs currently dealing with the coronavirus pandemic. In September, scheduled passage of the Dutch Remote Gaming Act was pushed back from January 2021 to March 2021, with the licensed market launch being pushed back two months to September 2021. The issue of whether an operator is active in the Dutch market is a historical one and has previously been raised in the application of the so-called cooling-off period, which has also been extended to coincide with the new market launch date. Under Dutch regulation, any operator seeking a licence in the regulated market must first prove that they have not actively recruited players in the Netherlands for a continuous period of 30 months. In other words, operators who have targeted the Dutch market after 1 July 2018 will not be immediately able to enter the regulated Dutch market when it opens. Firms which have already been sanctioned by the KSA for operating without a licence will also be subject to a delayed market entry, as the Dutch government seeks to ensure a level playing field. Should the motion on taxation of operators pass successfully through the upper chamber of the Dutch parliament, it will then be passed to the Dutch Council of State for review and ratification.