“The only two certainties in this life are death and taxes.”
It’s a never-ending battle, it seems. There’s a tax on your pay, tax on your house, tax on your food and clothes and every other thing you spend money on. And if you’re anything like us, and have been paying attention to the laws around lottery and gambling winnings, you might yell: “They may take our salaries, but they will never take our winnings!” If, however, you are not a content-filled online casino gambling review and guide site, you might be interested in finding out how you are taxed on your casino winnings as an online gambler in your country.
Gambling legislation differs from country to country. Each individual place approaches gambling from different cultural and legal perspectives. In some parts of the world, placing a bet will land you in jail, while in others, the government may put just your winnings in a cage. Many countries impose a tax on gambling. In some places, the gambler has to pay tax and must declare all winnings, while in others, the tax burden falls on the casino. Every country will have laws and tax regulations that you need to comply with, so it’s best to know which ones take the biggest chunk of change from gamblers.
When it comes to taxing gambling in land-based casinos, the countries that tax it most heavily are Denmark, where 75% tax is taken, Luxembourg, Austria and France, where they take a massive 80%. The heaviest hit, though, is Germany, which charges a wallet-shrivelling 90% tax on your winnings.
Other countries have a much lower level of tax for gamblers. In Belgium, where people have happily been gambling since at least 1300, the tax rate is 2.5%. Belgium does not charge a tax for either online or land-based casino winnings, but rather makes casinos pay a licensing fee. Cambodia has an even lower tax rate of 2%. If tax-free gambling is what you are looking for, then there is only one place to look. The land of ludicrously delicious pizza and 5 of the oldest and most famous casinos in Europe, including the famous Casinò di Campione. Yep, you guessed it, Italy comes in with the lowest gambling tax rate globally, and you really can’t get lower than zero, can you? Perfezione!
Online gambling and tax will depend on where you are in the world. If you live in the US, then you are required to declare your winnings on your tax returns in order to stay on the right side of the IRS. Players in places like the UK, Europe, and Canada can expect not to pay taxes on their winnings. Many countries have no interest in any of your online winnings, these include Australia, Ireland, Malta and Sweden, among others. It’s always best to check the law wherever you are.
Professional gamblers can be people who play competitively or have sponsorships, or they can be people whose regularity, frequency and style of play can be considered professional. In the latter case, it would mean that your winnings make up the bulk or a significant proportion of your regular income.
In these cases, the taxes involved can be quite complex, and, if this is you, we recommend getting advice from an experienced tax professional who knows the law of the land.
Whether you are a professional gambler who pays regular tax, or an individual who doesn’t have to, you still need to indicate these winnings on your tax return. This is partly for your own protection, so that it is on record as non-taxable, and therefore free for you to enjoy. While we understand the temptation to keep your mouth shut about winning a huge progressive slots jackpot, for instance, this doesn’t apply when it comes to the taxman.
The thing to remember is that in taxes, record keeping is key. If you want to make your tax experience less painful, then there are a few steps you can take. First, declare your winnings as other income on your tax report. You should also fill in your winnings and losses separately. And don’t forget to keep a record of those wins and losses throughout the year – and keep the proof. Second, remember that local laws may apply, so double-check your local laws regarding taxation.
If you want to ensure your online casino experience is not marred with sleepless nights worrying that the taxman cometh for your winnings, then fill in your returns correctly. There’s something quite satisfying about rolling those dice, knowing that you’re beyond reproach.