PokerStars players on the EU client in the Netherlands are breathing a sigh of relief this week after the leading tax agency in Holland withdrew its appeal with the high court in Amsterdam, challenging the notion that winnings on the online poker network are tax-exempt.
Netherlands online poker player Freerk Post, who according to the Hendon Mob has over $335,000 in live career earnings, brought a lawsuit last year against his country, alleging that iPoker winnings generated on PokerStars.EU shouldn’t be taxed by the government, since the poker platform is licensed through Malta, another European Union (EU) member.
The court agreed with Post and his legal team in November, but the Belastingdienst, the official tax authority for the nation, argued otherwise and filed an appeal. However, the revenue office withdrew its petition on Monday, to the delight of poker fans and of PokerStars itself.
“PokerStars is pleased that the Belastingdienst has withdrawn its appeal against the Amsterdam Court of Appeal ruling that a (Dutch) player can play on PokerStars.EU without paying tax on winnings,” the Amaya-owned property told PokerNews. “This confirmation is great news for affected players who can play on PokerStars with the knowledge that the tax status of PokerStars.EU has been confirmed.”
The legal deliberations involving Post’s lawsuit boils down to determining if the EU’s value-added tax (VAT) or some sort of tariff could be imposed by the Netherlands tax bureau.
Dutch officials argued that since the PokerStars dot com domain is registered in the Isle of Man, a non-EU nation, it has every right to tax a player’s winnings. Post and PokerStars claimed otherwise, as PokerStars.EU is operated through a license in the gaming-friendly island country of Malta, which is part of the EU.
Like the majority of European Union member states, Malta exempts betting and gambling from its VAT. However, authorities in the Netherlands argued that even though the Dutch Remote Gambling Act is still being discussed, the 29 percent foreign online gaming tax the bill would introduce should still be imposed on players participating in tournaments hosted by operators based outside of the EU.
Online gambling, VAT, and general tax duties has never come with an easily understood methodology. The Amsterdam Court of Appeal decision at least helps residents feel secure in not paying taxes on their PokerStars EU client winnings for the time being.
The Belastingdienst’s decision to retract its appeal voids a big question mark that would have hung over the heads of Netherlands PokerStars players for what was expected be at least a yearlong process. Following the initial ruling favoring Post in November, Dutch tax advisor Jurjen van Daal told PokerNews, “The term of an appeal can last for one to two years.”
Daal also explained that the appeal would largely focus on determining if the law is correctly applied. “The question of where a company is located, is a very real test,” Daal said.
Apparently Dutch tax officials didn’t believe they had sufficient evidence to continue litigation with the country’s high court.
For the first time since PokerStars.EU migrated its license to Malta, players in the Netherlands finally have a concrete tax interpretation on their winnings.