From 1 January 2019, if your net wagering revenue from customers located in Victoria exceeds $1,000,000 in a financial year, you have to pay the point of consumption wagering and betting tax.
Who pays the tax?
Wagering and betting entities will be liable to pay the tax on their net wagering revenue from customers located in Victoria at the time of making a bet.
Wagering and betting entities include:
- A registered bookmaker,
- The wagering and betting licensee in Victoria, and
- Any person registered or licensed in Victoria, or another State or Territory, to accept bets or provide a service through which bets are made.
Taxable wagering and betting types
There are several types of wagering and betting products that can be offered in Victoria, including totalisator, fixed odds, simulated (trackside) racing and betting facilitated by a betting exchange or other commission-based agent. This tax will apply to the net wagering revenue derived from these wagering and betting types.
Tax-free threshold and tax rate
Wagering and betting entities whose annual net wagering revenue from customers located in Victoria exceeds $1,000,000 in a financial year will have to pay the tax.
The tax will apply at a rate of 8 per cent of net wagering revenue from customers located in Victoria in excess of the tax-free threshold of $1,000,000.
Transitional arrangements
For the 2018-19 financial year, the tax-free threshold will be $500,000 as the tax will only apply to net wagering revenue earned in the second half of the financial year (1 January 2019 to 30 June 2019).
Tax calculation
The tax payable on a wagering and betting entity’s net wagering revenue will be calculated as follows:
- For entities that take wagers and bets directly from customers — 8 per cent of the net amount of revenue earned (total amount of all bets minus winnings paid).
- For entities that facilitate wagers and bets (i.e. operating a totalisator, a betting exchange or acting as an agent) — 8 per cent of the commissions earned from facilitating wagering and betting activity (for example, commissions earned operating a betting exchange).
Entities that directly take wagers and bets and also facilitate wagering and betting activity will combine their revenue from each source to determine their total net wagering revenue.
| Month | Net wagering revenue for month | Net wagering revenue for year to date | Tax-free balance (of $500,000) | Taxable net wagering revenue for month | Tax payable |
|---|---|---|---|---|---|
| January | $100,000 | $100,000 | $400,000 | Nil | Nil |
| February | $50,000 | $150,000 | $350,000 | Nil | Nil |
| March | $200,000 | $350,000 | $150,000 | Nil | Nil |
| April | $50,000 | $400,000 | $100,000 | Nil | Nil |
| May | $200,000 | $600,000 | Nil | $100,000 | $8,000 |
| June | $150,000 | $750,000 | Nil | $150,000 | $12,000 |
| Total | $20,000 |
| Month | Net wagering revenue for month | Net wagering revenue for year to date | Tax-free balance (of $500,000) | Taxable net wagering revenue for month | Tax payable |
|---|---|---|---|---|---|
| January | $100,000 | $100,000 | $400,000 | Nil | Nil |
| February | -$50,000 | $50,000 | $450,000 | Nil | Nil |
| March | $500,000 | $550,000 | Nil | $50,000 | $4,000 |
| April | -$50,000 | $500,000 | Nil | Nil | Nil |
| May | $200,000 | $700,000 | Nil | $150,000 | $12,000 |
| June | $150,000 | $850,000 | Nil | $150,000 | $12,000 |
| Total | $28,000 |
Determining a customer’s location
The customer’s location is to be assessed at the time of placing a wager or bet, or using a betting service (for example, placing a bet through a betting exchange).
On course and in-person wagers and bets
Any bets placed at a Victorian venue will be captured based on the location where the transaction occurs.
Online and phone wagers and bets
Operators must take all reasonable steps to ensure that any bets placed online or over the phone are captured based on the physical location (geo-location) of the customer at the time of making the bet. In recognition that it may be difficult for some operators to identify the physical location of a customer, operators are permitted to rely on specified address information given to them by customers as being the location of a person making a bet. Operators may rely on the customer’s residential address if the customer is an individual; or the customer’s principal place of business if the customer is a corporate customer. However, an operator cannot rely on the specified address information if the betting operator knows, or has reasonable grounds to suspect, that the address is not the location of the person when the bet is made.
In regard to commissions earned by betting exchanges, only commissions charged to customers located in Victoria at the time of placing the bet or using the service will be captured.
We will undertake compliance activities to ensure that the customer’s address information is accurate, with interest and penalty tax potentially applying where a betting operator or exchange fails to pay any of the tax it is liable to pay.
Grouping
Businesses may be grouped together and effectively treated as a single entity for wagering and betting purposes so that only one tax-free threshold can be claimed by the group for the relevant financial year.
A wagering and betting group exists where:
- The businesses are related bodies corporate within the meaning of s50 of the Corporations Act 2001 (this situation is commonly known as a holding and subsidiary relationship)
- The same person has (or the same persons together have), a controlling interest in at least two businesses
A wagering and betting entity includes all bodies and associations (corporate and unincorporated), partnerships and trustee of a trust.
A corporation has the same meaning as in s9 of the Corporations Act 2001 (Cth).
Administrative matters
We are responsible for administering the tax, which includes collecting the tax and managing compliance.
Reporting requirements
Register
If you are liable to pay the tax, you need to register with us before the end of the first month in which you become liable.
Lodge a return and pay the tax monthly
Once registered, you must submit a return and pay the tax monthly.
- Returns and payment are due within 30 days of the end of each month.
- You must submit a return even if no tax is payable for the month.
Lodge a return and make a payment
Reporting requirements for groups
Register
If the total net wagering and betting revenue of all the members in the group exceeds the tax-free threshold for the financial year, each of the entities is jointly and severally liable to pay tax.
Members of a group must nominate a member to be the Designated Group Entity. The Designated Group Entity needs to register with us before the end of the month in which the group becomes liable to pay the tax.
Lodge a return and pay the tax monthly
Once registered, the Designated Group Entity must lodge a return on behalf of the group and pay the tax monthly.
- Returns and payment are due within 30 days of the end of each month.
- The Designated Group Entity must submit a return even if no tax is payable for the month.
Lodge a return and make a payment
Cancel your registration
If circumstances change and you are no longer liable for the tax and do not expect to incur any liability in the future, you must let us know and submit a final return within 14 days.
Instructions on cancelling your registration will be published here in the coming months.
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