GERMANY Law and Practice Contributed by: Jörg Hofmann, Matthias Spitz and Michelle Hembury, Melchers
on the relevant state provisions. In some states, addi- tional levies or progressive tax rates that depend on the economic capability of the casino operator apply. The legislature reacted late to the coming into force of the new Interstate Treaty by amending the gambling tax law, the Race Betting and Lottery Act of 2021. A 5.3% tax on stakes in sports and horse race betting, virtual slot games and online poker was implement- ed. The effective tax rate is 5.03% as the tax itself is excluded from the tax base. Although concerns about the tax level were explicitly expressed in the legislative process, the tax rate on stakes in virtual slot games remained at 5.3% (effec- tively 5.03%), which will lead to a drastic reduction in RTP. The gambling tax is self-declared each month. An operator’s products subject to the Race Betting and Lottery Act are exempt from VAT.
Online gambling operators are not excluded from cor- porate taxation. Therefore, further profit taxes apply. Betting shop taxes of up to 3% on stakes may be imposed on betting shop owners at local level by municipalities. Retail slot-machine operators must pay municipal amusement tax in addition to regular corporate tax- es. Amusement tax rates differ from municipality to municipality, but range between 12% and 20% and will usually be based on the GGR generated from the slot machines. Lotteries are subject to 20% lottery tax.
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