Paying Taxes on Your Poker Earnings

Sportsbetting and other types of gambling are taxed. Poker is no exemption. In most cases, when you play poker, you have to pay taxes on the winnings you have made. The tax you have to pay on the winnings you make while playing poker depends on the winnings you made and the poker room where you played.

For example, the rules for paying taxes for online poker in European poker rooms are different from the rules for paying taxes for online poker in poker rooms outside Europe like those found at hold’em (ํ™€๋ค) poker site suggestions, so it can be a bit difficult to determine how much you actually owe the tax authorities. To give you a clearer idea of โ€‹โ€‹the tax you have to pay when playing poker, read this article about the tax rules that apply when playing online poker within the European Union and when playing online poker outside the European Union.

Playing online poker within the European Union

The rules regarding paying taxes when playing online poker have recently changed. Previously, poker was seen as a game of chance and as a player, you had to pay gambling tax (29 percent) on the winnings you made playing online cash games and poker tournaments, but this has changed with two rulings based on a lawsuit from an online poker player. This went like this.

When a poker player received an additional tax assessment from the IRS with a hefty amount of gambling tax over several profitable months in 2009, he decided to file a lawsuit against the IRS. Initially, the court ruled in favor of the tax authorities and ruled that the levy did not conflict with the free movement of capital and goods within the European Union, and after an appeal from the poker player, the same was ruled. However, after the case was appealed to the Supreme Court, the highest judicial institution in the Netherlands, a different decision was taken. The Supreme Court ruled that taxation is not compatible with the free movement of services within the European Union and therefore annulled the judgment of the Court of Appeal.

Because the Supreme Court ruling is the highest ruling, it is now used as the new standard. This means that winnings from online poker can no longer be taxed with the gambling tax of 29 percent, but that playing online cash games has become tax-free. And have you paid taxes from 2008 on any winnings you made playing online poker? Then you can simply reclaim this paid tax.

Read also: Basic Poker Betting Guide

Playing online poker outside the European Union

It is important to know that the ruling of the Supreme Court has a caveat. For example, you can only play tax-free poker at websites that are located within the European Union. If a poker room is located outside the EU, you will have to pay gambling tax on your winnings. Unfortunately, most poker rooms are located outside the EU, which means that you still have to pay tax on the winnings you make at these poker rooms. If you do not want to pay tax on your winnings, it is recommended to play at a poker room that is located within the European Union.

To pay or not to pay tax?

Do you play at a poker room that is not located in the European Union? Then you, unfortunately, have to pay tax on the profits you make. Some poker players doubt whether they should report their income from playing poker to the tax authorities. It is generally recommended that you report the earnings of playing poker fairly, as failing to disclose earnings can lead to problems later on. If you want to avoid having to pay back a lot of money later and maybe even get a fine, then it is definitely recommended to pay the tax on playing poker fairly.

Paying Taxes on Your Poker Earnings Read More