Taxes on profits from online casinos
Have you ever won a higher amount in an online casino and then had to ask yourself whether it might even have to be taxed? If so, you are not alone with this question, because tax law is one of the most complicated legal areas that Canadian law has to offer. The following lines will shed light on the subject.
The market for online casinos booms in 2018 as never before
The online casinos and sports betting providers are at the forefront. Casinos, which have their license in Germany, may legally provide their gambling offer for you. An overview of the legal situation in Germany can be found here. Also the vast majority of the sites of the sports betting providers on the net can be legally gambled.
However, many are more convinced by the offer in online casinos, because here you can find classics like the following games:
- Lacquer Jack
- Slot games
Apart from that, several online casinos have now also integrated a corresponding offer for sports betting as stated on www.bestcanadacasino.ca. From a tax point of view, however, sports betting differs considerably from other games of chance, as there is a state betting tax of five percent. Normally this would have to be paid by the betting persons, but in many cases the providers are involved.
In contrast, there is no such tax for the traditional games of chance in an online casino, so that the “basic principles” of German tax law for private individuals and the self-employed apply here. But what does this mean in detail?
The tax authorities divide the players into hobby gamblers and professional players
In detail, this means that winnings from online casinos are only taxable if the three conditions below are met by you:
1. You must play regularly
2. They must make regular profits
3. You have to make a living from these profits
As can be seen from the conditions that the tax authorities consult when answering the tax question, these are relatively unspecific, so that they need to be more closely specified. You play on a regular basis, especially if you do not only play poker tournaments with friends at the online casino on weekends or if this is just a hobby among many others of yours.
Regularly, you will make a profit especially if you have not only won a big poker tournament once or so. Even if you have won a very large amount of money in this tournament, the tax office has no right to tax you.
This is because the third condition is missing, which says that you have to make a living from playing. If you have a normal job or other sources of income, for example from renting a condominium, then you are not gambling full-time or professionally.