Application of tax on winnings in online casino in different countries
As a rule, when it comes to taxation of the gaming industry, this refers to the obligations of operators. However, there is an exception – a tax on winnings.
Everyone has probably heard about the fabulous taxes on winnings in the American lottery. A similar picture is observed with the “tribute” to the state when winning in land gambling establishments. However, with an online casino, everything isn’t so obvious.
It should be noted that in many jurisdictions the activities of online casino are completely prohibited, for example, in the Russian Federation. Accordingly, it makes no sense to talk about the presence of taxation in such a situation. However, if we consider the taxation of the online segment as a whole, it should be kept in mind that one of its varieties is the tax on the operations of online bookmakers.
Of all the CIS countries, the most interesting example in this regard is Belarus. Online gambling is legalized here. At the same time, tax rates are set for units of gambling equipment. Funds must be transferred exclusively to legal entities.
As for the UK, despite the strictness of British laws regarding gambling, there is no tax on winnings in online casinos in the country. Operators are required to pay a tax rate of 15% of gross income.
The specificity of the United States is that each state has the right to determine its own policy regarding the gaming industry. Despite the fact that in most of them the organization of work of online casino is illegal, the legalization of sports betting is becoming more common. Some states allow online bookmakers or even mobile betting apps. The most stringent rules regarding such winnings apply in Pennsylvania. The tax rate for residents is 30%.
In Australia, the activities of international online gambling operators are prohibited; accordingly, only market licensees are entitled to organize the work of online casino. The latter pay a tax rate of 15% of the GGR. At the same time, users are not burdened with tax obligations.
Online casino activities are legalized in Mexico and Argentina. Operators are licensed by local gambling regulators. Mexican operators are required to pay a 30% tax to the state treasury. In addition, there is a payout tax payable by both the operator and the player. The state charges 12% from gambling companies, and only 6% remains to be paid to the winner. Income tax in Argentina is 41.5%. Moreover, if the user has won a cash prize in excess of 48 euros, he is obliged to pay the state 31%.
In South Africa, not only the organization of work of online casino but also participation is illegal. The only legitimate online operators are betting companies.
Corporate income tax in the country is set at 29%. Players who have successfully participated in online betting operations are obligated to “share” with the state. The size of the contribution will be 15% of the prize received.