A lottery participant claims a tax deduction for his lottery stake in his income tax return.
ANBI
The participant justifies his claim for a tax deduction on the grounds that the Tax and Customs Administration has designated the lottery as a public-benefit organisation (ANBI). Donations to such an organisation are deductible for income tax purposes.
The case The case comes before the Zeeland-West-Brabant District Court. This tax judge concludes that this does not constitute a gift and disallows the deduction. This is because, in return for the stake paid into the lottery, the participant receives tickets that give them a chance to win prizes. The stake is therefore not a payment made out of generosity, but consideration for a service rendered. This applies even if the participant does not win a prize.
The situation would be different if the lottery tickets received were of only minor importance or amounted to no more than a symbolic (counter)performance. However, according to the court, this is not the case.
Churches
The participant also cites a comparison with church organisations as a further argument. Contributions paid to churches are tax-deductible, and in return the church offers the opportunity to profess one’s faith. The difference with the lottery, however, is that contributions to the church are not compulsory; the church offers the opportunity to profess one’s faith even to people who do not make a contribution. Anyone who does not buy a ticket in the lottery, however, has absolutely no chance of winning a prize.
Even more arguments
The interested party put forward a few more arguments. For instance, he refers to the explanatory notes in the Tax and Customs Administration’s tax return software, which state that payments to an ANBI are tax-deductible. He also takes the view that the principle of equality is being breached because the tax deduction for taxpayers whose tax returns are not processed manually is not being adjusted. Furthermore, he believes that the Tax and Customs Administration is abusing its powers, partly due to the length of time the case has taken.
The Court has dismissed all these arguments. The same applies to the argument that the rate of tax interest is too high, as the court is required by law to administer justice and is not permitted to pass judgement on the intrinsic value or fairness of the law.