Online gambling has now reached its peak as more and more commercial casinos have to close their doors. Gambling has almost completely shifted to the internet, as gambling on the internet has some advantages that cannot be neglected. One big advantage is the payout ratios, as these are significantly higher in online casinos. As a rule, the payout rates for slot machines are 95 to 96 percent. In addition, there are regular bonus offers and loyalty programmes in the online casinos, so that players can secure free spins and free money. There is also greater flexibility in online casinos, as casinos are open around the clock. These include, among others, the Lucky Dino, the All Slots.
Thanks to mobile apps, online casinos can now be used on the go, which has increased flexibility even more. In addition, customers can use the online casinos from the comfort of their homes. Due to the high popularity of online casinos, the question often arises whether the winnings in an online casino have to be taxed. The following text will deal exclusively with taxes and explain whether and when taxes have to be paid.
What requirements must be met?
Basically, there are two requirements that must be met if the profit is to be tax-exempt. These two requirements are explained in the following section:
It is important that the prize was won within the European Union. The prize must have been won in Germany or in a European member state which has a European Gambling licence has. In addition, the provider must pay tax on all turnover in the European country. Money won at an online casino that is licensed in the Caribbean, for example, must be registered and taxed. The same applies to winnings made on a Las Vegas holiday, for example. If you win more than 10,000 euros, you have to declare them to customs. However, the winnings do not have to be taxed, only declared.
The second condition that must be fulfilled if the winnings are not to be taxed is that one must not be a professional gambler. In the case of a one-time, large win, one cannot speak of a professional gambler. This is an exception. If you regularly win large sums and have them paid out to your account, you must expect to pay tax on the winnings. Especially if the winnings from gambling are the only source of income. There could also be problems if the winnings exceed the actual salary. In these two cases, the office may classify the gambler as a professional gambler. If one is subsequently declared a professional gambler, then all winnings would have to be taxed retroactively. It does not matter which casino the winnings were won in.
ConclusionIf you want to be on the safe side when it comes to winnings, you should fulfil two requirements. The winnings obtained must come from the European Union and the player must not be declared as a professional gambler. Professional gamblers are players who live solely from the winnings from gambling or players who earn more money from gambling than in their actual profession.
Do taxes have to be paid on winnings in an online casino?
As a rule, customers in an online casino do not have to pay any taxes for gambling. The same applies to Lotto, Sports betting and similar gambling. However, a few conditions have to be met. The current status is that no taxes have to be paid on a profit, as this is written down in the law.
This law reads:
Of the turnover covered by § 1 par. 1 no. 1, the following shall be exempt from tax: turnover covered by the Racing Betting and Lotteries Act.
UstG § 4 No. 9b
This law applies to all games of chance that are taxable in Germany or within the European Union. The providers of these games of chance must pay a gambling tax or a turnover tax in the European Member State in which the gambling takes place. Only then are the winnings from gambling absolutely tax-free.
The most common questions from players at the casino
|Do I have to pay tax on my winnings in the online casino|
|If so, in which country do I have to increase the price of my profit?|
|How high is the profit tax|
|What happens if I do not pay tax on my profit?|
|Is there a legal way to avoid taxation?|
|For example, do I have to pay tax on my winnings at the casino in Las Vegas?|
Conclusion: The winnings from a game of chance are usually tax-free as long as the provider is located in Germany or within the European Union. In addition, the provider must pay taxes in the country where the gambling takes place.
Which games of chance in the online casino are tax-free?
As already mentioned, all games of chance in Germany are completely exempt from tax. The amount of the winnings and the game play only a subordinate role or no role at all. There is one prerequisite, however. The game that cannot be based on can. It must be a pure game of chance. These games are absolutely tax-free:
- Slot machines
- Video Poker
- Scratch cards
There are certain conditions under which winnings in online casinos must be taxed. As long as the player is not considered a professional gambler and the winnings were made in a European or German online casino, they are completely tax-free. Games such as slot machines, roulette, blackjack, poker, baccarat and video poker are tax-free because they are based on luck and not on skill.
FREQUENTLY ASKED QUESTIONS
Winnings in an online casino are usually tax-free, provided the provider is based in Germany or within the European Union and the player is not classified as a professional gambler.
The prerequisite for tax-free winnings is that the winnings were earned within the European Union at a provider with a European gambling licence and the player is not classified as a professional gambler.
Games such as slot machines, roulette, blackjack, poker, baccarat, video poker, craps, keno, bingo, lotto and scratch cards are tax-exempt provided the player is not a professional gambler and the winnings are made in a European or German online casino.