Esports: Senators' fiscal boost to this booming sector

Jean-Baptiste Guillot and Virginie Molho, Sports and Esports law experts, are particulary delighted by the adoption of the amendment related to Esports and upheld by Senator Christine Lavarde in the context of the Senate's examination of the Finance Bill (“Projet de Loi de Finances”) for 2021.

This amendment aims to apply a reduced VAT rate of 5.5% to video game competitions. It is worth mentioning that by 2021, the world Esports market should represent more than $1.5 billion.

This measure is part of the National Esports 2020 - 2025 Strategy presented in October 2019 by the Sports Minister, Roxana Marcineanu, and the Secretary of State for Digital, Cédric O, which aims to make France the European leader in this sector by clarifying, in particular, the taxation of video game competitions and associated earnings.

This amendment has been adopted despite the French Government's unfavorable position which considers video game competitions to fall within the category of intellectual and non-competitive sports activities.

Article 9 bis D (new) has therefore been created and reads as follows :

• I . - J of Article 278 0 bis of the French General Tax Code is completed by the words: "or video game competitions as defined under Article L.321 8 of the French Internal Security Code".
• II. - This Article is applicable to services for which the event giving rise thereto occurs as from January 1, 2021.
• III. – The resulting loss of revenue for the State under this Article is compensated accordingly by the creation of an additional tax to the fees mentioned in Articles 575 and 575 A of the French General Tax Code.

Jean-Baptiste Guillot "We shall keep a close eye on the fate of this provision throughout the ongoing examination of the 2021 Finance Bill.".