North Netherlands District Court has ruled that the income generated from the sale of tickets for sporting events (via the Viagogo platform) has been correctly taxed as income from other activities (ROW).
ROW
Taxable income from other activities arises if:
- participation in economic activity and;
- with a view to achieving benefits and;
- these benefits can objectively be expected.
The Tax and Customs Administration and the trader have already agreed that ticket trading constitutes participation in economic activity. Nor is it disputed that the trader aims to make a profit.
Speculation
The dispute therefore centres on the question of whether the intended benefit is also objectively foreseeable. The trader argues that the activities are primarily speculative in nature. In the case of speculative activities, there is no objectively foreseeable benefit.
The Court rejects this argument. The trader influences the transaction gains realised through his actions, whereas speculative profits would arise even without such influence. The fact that losses were incurred on some ticket purchases and sales does not alter this. At the hearing, the trader stated to the court that he does not buy tickets at random, but specifically seeks tickets for (multi-day) sporting events because the risk of them remaining unsold is lower in such cases.
Research
The reason the Tax and Customs Administration decided to look into the ticket reseller’s situation is an investigation into taxpayers who receive payments from an account held by a foreign payment service provider. Responses to questions from the Tax and Customs Administration show that the balances of the bank accounts held by the trader abroad amounted to €348,759 in 2016 and €313,309 in 2017. The Tax and Customs Administration has issued additional assessment notices for these amounts, plus penalty charges of 25%.