I am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply.
Article 135(1)(i) of VAT Directive 2006/112/EC provides a VAT exemption for "betting, lotteries and other forms of gambling, subject to the conditions and limitations laid down by each Member State". The European Court of Justice (ECJ) has ruled that Member States have discretionary power to fix conditions and limitations on the exemption from VAT for certain forms of gambling. However, these conditions and limitations are constrained by ECJ jurisprudence such as the Rank case (C-259/10) which found that the principle of fiscal neutrality was breached by UK VAT law when it treated differently for VAT purposes certain types of gambling (being mechanised cash bingo and slot machines), where the services were identical or similar from the perspective of the consumer, and met the same needs of the consumer.
Sports bets placed in bookie shops or online fall within the distinction in the Rank case. It is not possible to charge VAT on a bet on the outcome of a race or the outcome of a match depending on the medium through which the bet was waged. The Betting (Amendment) Bill 2013, once enacted, will introduce a new licensing and taxation regime for remote (online) bookmakers and betting intermediaries (betting exchanges) who enter into bets with persons in the State and provide, among other things, certainty in relation to the VAT treatment of such services.
Electronically supplied services are taxable at the standard rate in each EU Member State, unless a specific exemption applies. For example, if gambling is exempt in an EU Member State, it would also be exempt in that EU Member State if it is supplied as an electronically supplied service. Accordingly, although the place of supply of services to non-taxable persons from online bookies operating from Gibraltar is Ireland, VAT is not charged on the supply as such supplies are primarily exempt from VAT in Ireland.
The Betting (Amendment) Bill, once enacted, should ensure that all comparable bookmakers activities offered in the State are subject to betting tax and exempt from VAT.