Do I have to pay tax on betting? This is a question that I hear very often lately, and it gets more and more popular as more countries regulate gambling income. So I decided to start a thread where we could discuss taxation on betting incomes, but before anything else, I must stress and highlight, you should check with your tax authorities wherever you are based and according to the gambling laws of your country of residence. In some more complicated situations, you should be checking the legislation and the regulation of the countries that you travel, or work from.
For many professional gamblers, the idea that winnings from betting could be tax-free seems good. And the good news is that all gambling winnings are indeed tax-free not only in the United Kingdom but also in many other countries across the world, including Australia, Finland, Italy, Malta, and Denmark, to name just a few of them. This is valid now 19th of October 2021. Make sure you ask an expert if you read that after publishing.
Why Betting Winnings Are Tax-Free?
There are good reasons why betting winnings remain bet tax-free in many parts of the world. If they were not free of tax, then there would be some form of a credit system to offset the losses. If the government of your country of residence was claiming tax revenue on betting, it would seem unfair if the losses could not be offset against this. And the truth is that the system would be complex to be workable. Many governments across the world do not consider gambling activities as a trade or source of income. This is because winning at any sportsbook purely depends on luck, according to their opinion. Other countries realise it becomes messy to calculate the P/L of a player. Finally, there are some countries (yes indeed) that promote gambling, as they see it as a good income revenue for their economies.
What about Professional Bettors?
It may seem logical that the gambling tax situation would be totally different for professional gamblers than it's for occasional bettors. When it comes to pure winning bets, that isn't the case. As mentioned earlier, all sports betting winnings aren't taxable in some countries, and this remains true for professional bettors. That is because many authorities do not consider professional betting as a taxable trade. All betting winnings, therefore, remain tax-free regardless of whether they make up your primary source of income or not. The situation can only get complicated if your income is related to betting but not the actually direct winnings. For example, in many countries, the appearance fees that are paid to poker gamers playing at the tournaments represent payments for service, and because of this, it can be taxable.
Tax legislation and laws do vary from one country to another, and it would benefit you for reading and understand certain regulations and rules within your own country. Doing so will help you know if your betting winnings are taxable or not.
Do You Need to Declare Your Betting Winnings to the Government?
Again, this depends on several factors, including where you live, travel and work. Since your winnings aren’t taxable, you do not need to declare them to the government. Likewise, you’ll not get a rebate against your betting losses, so no need to declare them. Some countries will request you to declare your winnings, especially when they are huge. When filling your tax returns, you will find a specific field where you can enter your betting winnings. The best part is that you'll not be taxed, and this can be helpful in future investigations if you're audited. It also helps to keep receipts and records of your betting winnings as proof of how you obtained your money. In most cases, high-value purchases need a fraud check, and if you do not have proof of where your cash came from, it can easily land you in trouble. In many countries, you must show where your money came from before you can make any large purchase like a car or a house.
Do You Need to Pay Betting Tax in Other Countries?
Not all countries around the world allow punters to enjoy tax-free winnings. There are many other countries that tax gambling profits. If you bet and win in any country that taxes betting winnings, then you will have no option but to pay at the point of supply. And if you want to bring all of your winnings back into your country, you will need to follow all the rules and procedures in place.
Are Winnings from Spread Betting Taxable?
Many regulatory authorities across the universe do not regulate spread betting, binary options and index wagering. Instead, these forms of betting fall under financial authorities in different countries. Despite this, you’ll not need to pay the tax on spread betting winnings. Also, you do not pay tax when placing bets on fixed odds and sports market fluctuations with bookies.
However, if spread betting is your main source of income or your job, you will have to pay the tax. In this scenario, your government considers you a trader. On the other hand, you would write any spread betting losses off against tax. Also, if you trade on any of the stock markets, this's another different story. This type of trading is liable to capital gains as well as stamp duty.
Might the Authorities Query Your Income?
Whether you’re a regular punter or an occasional gambler, who places bets for fun, there's a chance that your government will want to know about your betting activities. We have encountered numerous situations like this reported by our forum members. For lucky and skilful individuals who make a part-time or full living from sports betting, there's a slight chance that your government can be interested to know your source of money. However, this does not have any relationship with the taxability of betting winnings.
Final Thoughts
Every country has different laws and regulations on betting. There is no universal approach when it comes to gambling and taxation. ''Nothing is certain but death and taxes'' according to Benjamin Franklin. We started this thread to discuss betting taxation in several countries and exchange ideas. Again, you should check with your tax authorities wherever you are based and according to the gambling laws of your country of residence.
Do You Pay Tax on Betting?
- Marvin
- Newbie
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Re: Do You Pay Tax on Betting?
Do you know if I have to declare my betting winnings to the Government when living in Germany? I could not find any information regarding this! Any help would be appreciated!Do You Need to Declare Your Betting Winnings to the Government?
Again, this depends on several factors, including where you live, travel and work. Since your winnings aren’t taxable, you do not need to declare them to the government. Likewise, you’ll not get a rebate against your betting losses, so no need to declare them. Some countries will request you to declare your winnings, especially when they are huge. When filling your tax returns, you will find a specific field where you can enter your betting winnings here. The best part is that you'll not be taxed, and this can be helpful in future investigations if you're audited. It also helps to keep receipts and records of your betting winnings as proof of how you obtained your money. In most cases, high-value purchases need a fraud check, and if you do not have proof of where your cash came from, it can easily land you in trouble. In many countries, you must show where your money came from before you can make any large purchase like a car or a house.
- B_arber
- Gaining experience
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Re: Do You Pay Tax on Betting?
OK, gambling income is not taxable in the UK, but what if you make money as a professional?
What if you use the accounts of friends and relatives? Will this be considered as taxable money?
How about the big syndicates like star lizard? Most probably they also use 3rd party accounts to place their bets and I am sure an organisation like this is taxed like a corporation.
What if you use the accounts of friends and relatives? Will this be considered as taxable money?
How about the big syndicates like star lizard? Most probably they also use 3rd party accounts to place their bets and I am sure an organisation like this is taxed like a corporation.
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gamblehappier
- Pro
- Karma: 19
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If you do not have another income it is good to declare to the tax office your profits,in order to justify money if you want to buy something in the future(house,car etc).Just declare not paying tax(if your betting profits is not taxable in your country).
The only sure is that big syndicates like star lizard use 3rd party accounts.Maybe this is best way in order to survive with big proftis in this business,because you actually build a company and start cooperate with people.Gambling syndicate thread for more info.
Re: Do You Pay Tax on Betting?
There is no clear answer here because it depends from the country.There are countries that you pay tax fee per amount bet or per column.B_arber wrote: ↑Sun Feb 06, 2022 7:32 amOK, gambling income is not taxable in the UK, but what if you make money as a professional?
What if you use the accounts of friends and relatives? Will this be considered as taxable money?
How about the big syndicates like star lizard? Most probably they also use 3rd party accounts to place their bets and I am sure an organisation like this is taxed like a corporation.
If you do not have another income it is good to declare to the tax office your profits,in order to justify money if you want to buy something in the future(house,car etc).Just declare not paying tax(if your betting profits is not taxable in your country).
The only sure is that big syndicates like star lizard use 3rd party accounts.Maybe this is best way in order to survive with big proftis in this business,because you actually build a company and start cooperate with people.Gambling syndicate thread for more info.
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arbusers
- Administrator
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Re: Do You Pay Tax on Betting?
As gamble happier said you must specify the country first before asking for advise.
Speaking of advise, you should be looking at the advise of the correct specialist and this could be something you can't afford if you are looking to enjoy a service similar to star lizard's. I m sure they employ very capable (and expensive) specialists in accounting and law and they already know the answers. Since Star Lizard is UK based and I m sure they wouldn't do something illegal, I suspect they found the legal way to use 3rd party accounts that contribute to their profitability without having to pay tax. But this is just a general idea, and not something I can prove with facts.
Speaking of advise, you should be looking at the advise of the correct specialist and this could be something you can't afford if you are looking to enjoy a service similar to star lizard's. I m sure they employ very capable (and expensive) specialists in accounting and law and they already know the answers. Since Star Lizard is UK based and I m sure they wouldn't do something illegal, I suspect they found the legal way to use 3rd party accounts that contribute to their profitability without having to pay tax. But this is just a general idea, and not something I can prove with facts.
- crowned
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- Karma: 7
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Re: Do You Pay Tax on Betting?
Would you declare winnings from a bookmaker or an agent who is not licensed or regulated in the country where you are taxed?
- freaked
- Has experience
- Karma: 4
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Re: Do You Pay Tax on Betting?
An option could be to set up a company in a country that does not tax gambling profits.
Then even if collaborating with someone from a country with a high gambling tax, a contract could be signed in advance stating that only a certain percentage of total stakes were funded (and thus won) by the account holder.
EG - Irish company collaborates with Spanish individual. Irish company funds 90% of the bets. Only 10% of the profits are taxed as per Spanish taxation rates.
Assuming the founder of such company wanted to pay himself the profits, this would then be subject to income tax law in the country of residency of the company founder.
*This is based on many assumptions and not fact - please pick apart any flaws in the above.
Then even if collaborating with someone from a country with a high gambling tax, a contract could be signed in advance stating that only a certain percentage of total stakes were funded (and thus won) by the account holder.
EG - Irish company collaborates with Spanish individual. Irish company funds 90% of the bets. Only 10% of the profits are taxed as per Spanish taxation rates.
Assuming the founder of such company wanted to pay himself the profits, this would then be subject to income tax law in the country of residency of the company founder.
*This is based on many assumptions and not fact - please pick apart any flaws in the above.
- vinciguerra
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Re: Do You Pay Tax on Betting?
You're making this way too complicated. If that Spanish individual lives in Spain he would need to pay tax on this winnings period. The Tax Service doesn't care what some individual agreed with an Irish company, why would they? If that Spanish individual doesn't want to pay tax, he should physically move to a country where there is no tax.EG - Irish company collaborates with Spanish individual. Irish company funds 90% of the bets. Only 10% of the profits are taxed as per Spanish taxation rates.
- freaked
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Because the Spanish individual is liable to pay tax on his gambling winnings.
If the tax authority ask why only tax of 10% of the winnings was paid, the individual produces the contract, along with bank transfers showing 90% of stakes were indeed funded by the Irish company, and 90% of returns were remitted to the Irish company.
Re: Do You Pay Tax on Betting?
vinciguerra wrote: ↑Sun Jul 10, 2022 7:54 pmEG - Irish company collaborates with Spanish individual. Irish company funds 90% of the bets. Only 10% of the profits are taxed as per Spanish taxation rates.
The Tax Service doesn't care what some individual agreed with an Irish company, why would they?
Because the Spanish individual is liable to pay tax on his gambling winnings.
If the tax authority ask why only tax of 10% of the winnings was paid, the individual produces the contract, along with bank transfers showing 90% of stakes were indeed funded by the Irish company, and 90% of returns were remitted to the Irish company.
- vinciguerra
- Has experience
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Re: Do You Pay Tax on Betting?
Again, why would the Tax Service care?
The bet, also essentially a contract, was made between the bookmaker and the (Spanish) individual. There is no contract between the bookmaker and the Irish company. The Tax Service is under no legal obligation whatsoever to honor a contract it never agreed to itself.
Your 10% is picked completely arbitrarily. Why not make that 0%? Why not sign a contract that the entire bet was placed by the Irish company? Why not sign such contracts in general in daily life, so nobody ever has to pay tax ever again? Because it doesn't work that way.
The bet, also essentially a contract, was made between the bookmaker and the (Spanish) individual. There is no contract between the bookmaker and the Irish company. The Tax Service is under no legal obligation whatsoever to honor a contract it never agreed to itself.
Your 10% is picked completely arbitrarily. Why not make that 0%? Why not sign a contract that the entire bet was placed by the Irish company? Why not sign such contracts in general in daily life, so nobody ever has to pay tax ever again? Because it doesn't work that way.
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quazynot
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This is very important and interesting topic
There have been lately two sentences by the Italian Supreme Court which examined two cases of italian customers to whom Tax Authorities asked money on winnings.
Both sentences referred to European Union Regulation to make the final decisions
Case 1
The customer won around 1,5 mil in Monaco Casinò (Principato di Monaco). Final decision has been that the customer has to pay taxes to italian authorities as the place of winning is not included in the European Union or in EAA (Europen Economic Area which means also Norway-Iceland-Liechtenstein)
Case 2
The customer won around 700 ke in Casinò in Slovenia. In this case the Supreme Court said no taxes can be claimed by authorities as the Casinò is in the European Union
So the general principle stated by Supreme Court, considering the European Union regulation, is that all winnings made in Italy/European Union country/EAA country are free of taxes as otherwise it would be a discrimination between Italy Casinò and EU Casino which is not allowed. On the other hand winnings made on Casinò outside European Union or EAA are subject to taxation.
https://www.rivistadirittotributario.it ... a%E2%80%9D.
The second paragraph of the link is translated in English. The article is dated March 2022
When we play through brokers/agents, let s say for example BIA, do you think:
1) winnings can be deemed as outside Europen Union? They have two addresses one in Cipro (EU) and one in Curacao where they re licensed
2) does the bookmaker with which you play through the broker may change how winnings may be deemed between European Union or outside it?
Thanks for sharing your thoughts
Re: Do You Pay Tax on Betting?
arbusers wrote: ↑Wed Oct 20, 2021 6:26 amDo I have to pay tax on betting? This is a question that I hear very often lately, and it gets more and more popular as more countries regulate gambling income. So I decided to start a thread where we could discuss taxation on betting incomes, but before anything else, I must stress and highlight, you should check with your tax authorities wherever you are based and according to the gambling laws of your country of residence. In some more complicated situations, you should be checking the legislation and the regulation of the countries that you travel, or work from.
For many professional gamblers, the idea that winnings from betting could be tax-free seems good. And the good news is that all gambling winnings are indeed tax-free not only in the United Kingdom but also in many other countries across the world, including Australia, Finland, Italy, Malta, and Denmark, to name just a few of them. This is valid now 19th of October 2021. Make sure you ask an expert if you read that after publishing.
Why Betting Winnings Are Tax-Free?
There are good reasons why betting winnings remain bet tax-free in many parts of the world. If they were not free of tax, then there would be some form of a credit system to offset the losses. If the government of your country of residence was claiming tax revenue on betting, it would seem unfair if the losses could not be offset against this. And the truth is that the system would be complex to be workable. Many governments across the world do not consider gambling activities as a trade or source of income. This is because winning at any sportsbook purely depends on luck, according to their opinion. Other countries realise it becomes messy to calculate the P/L of a player. Finally, there are some countries (yes indeed) that promote gambling, as they see it as a good income revenue for their economies.
What about Professional Bettors?
It may seem logical that the gambling tax situation would be totally different for professional gamblers than it's for occasional bettors. When it comes to pure winning bets, that isn't the case. As mentioned earlier, all sports betting winnings aren't taxable in some countries, and this remains true for professional bettors. That is because many authorities do not consider professional betting as a taxable trade. All betting winnings, therefore, remain tax-free regardless of whether they make up your primary source of income or not. The situation can only get complicated if your income is related to betting but not the actually direct winnings. For example, in many countries, the appearance fees that are paid to poker gamers playing at the tournaments represent payments for service, and because of this, it can be taxable.
Tax legislation and laws do vary from one country to another, and it would benefit you for reading and understand certain regulations and rules within your own country. Doing so will help you know if your betting winnings are taxable or not.
Do You Need to Declare Your Betting Winnings to the Government?
Again, this depends on several factors, including where you live, travel and work. Since your winnings aren’t taxable, you do not need to declare them to the government. Likewise, you’ll not get a rebate against your betting losses, so no need to declare them. Some countries will request you to declare your winnings, especially when they are huge. When filling your tax returns, you will find a specific field where you can enter your betting winnings. The best part is that you'll not be taxed, and this can be helpful in future investigations if you're audited. It also helps to keep receipts and records of your betting winnings as proof of how you obtained your money. In most cases, high-value purchases need a fraud check, and if you do not have proof of where your cash came from, it can easily land you in trouble. In many countries, you must show where your money came from before you can make any large purchase like a car or a house.
Do You Need to Pay Betting Tax in Other Countries?
Not all countries around the world allow punters to enjoy tax-free winnings. There are many other countries that tax gambling profits. If you bet and win in any country that taxes betting winnings, then you will have no option but to pay at the point of supply. And if you want to bring all of your winnings back into your country, you will need to follow all the rules and procedures in place.
Are Winnings from Spread Betting Taxable?
Many regulatory authorities across the universe do not regulate spread betting, binary options and index wagering. Instead, these forms of betting fall under financial authorities in different countries. Despite this, you’ll not need to pay the tax on spread betting winnings. Also, you do not pay tax when placing bets on fixed odds and sports market fluctuations with bookies.
However, if spread betting is your main source of income or your job, you will have to pay the tax. In this scenario, your government considers you a trader. On the other hand, you would write any spread betting losses off against tax. Also, if you trade on any of the stock markets, this's another different story. This type of trading is liable to capital gains as well as stamp duty.
Might the Authorities Query Your Income?
Whether you’re a regular punter or an occasional gambler, who places bets for fun, there's a chance that your government will want to know about your betting activities. We have encountered numerous situations like this reported by our forum members. For lucky and skilful individuals who make a part-time or full living from sports betting, there's a slight chance that your government can be interested to know your source of money. However, this does not have any relationship with the taxability of betting winnings.
Final Thoughts
Every country has different laws and regulations on betting. There is no universal approach when it comes to gambling and taxation. ''Nothing is certain but death and taxes'' according to Benjamin Franklin. We started this thread to discuss betting taxation in several countries and exchange ideas. Again, you should check with your tax authorities wherever you are based and according to the gambling laws of your country of residence.
This is very important and interesting topic
There have been lately two sentences by the Italian Supreme Court which examined two cases of italian customers to whom Tax Authorities asked money on winnings.
Both sentences referred to European Union Regulation to make the final decisions
Case 1
The customer won around 1,5 mil in Monaco Casinò (Principato di Monaco). Final decision has been that the customer has to pay taxes to italian authorities as the place of winning is not included in the European Union or in EAA (Europen Economic Area which means also Norway-Iceland-Liechtenstein)
Case 2
The customer won around 700 ke in Casinò in Slovenia. In this case the Supreme Court said no taxes can be claimed by authorities as the Casinò is in the European Union
So the general principle stated by Supreme Court, considering the European Union regulation, is that all winnings made in Italy/European Union country/EAA country are free of taxes as otherwise it would be a discrimination between Italy Casinò and EU Casino which is not allowed. On the other hand winnings made on Casinò outside European Union or EAA are subject to taxation.
https://www.rivistadirittotributario.it ... a%E2%80%9D.
The second paragraph of the link is translated in English. The article is dated March 2022
When we play through brokers/agents, let s say for example BIA, do you think:
1) winnings can be deemed as outside Europen Union? They have two addresses one in Cipro (EU) and one in Curacao where they re licensed
2) does the bookmaker with which you play through the broker may change how winnings may be deemed between European Union or outside it?
Thanks for sharing your thoughts
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