Do You Get Taxed On Gambling Winnings In Australia

1. Do You Get Taxed On Gambling Winnings In Australia Dollars
2. Do You Get Taxed On Gambling Winnings In Australia Money

In Australia, the Interactive Gambling Act (2001) governs the rules and laws about online gambling. This is a national law and that was first enacted in the Australian Parliament on June 28, 2001. The Act targets online gambling operators. And makes it an offence for them to offer ‘real-money' online interactive gambling to residents in Australia.

Do You Get Taxed On Gambling Winnings In Australia Dollars

Winning the lotto is good news in itself, but it turns out there are even more benefits to becoming an instant millionaire in Australia. Those who win money on Lotto, instant scratchies or even. The primary purpose for the absence to get taxed on gambling winnings in Australia is that the gambling operators are saddled. This taxation contrasts between the areas. There are charges on the turnover sum, on player loss and on net profit. Many gamblers do not pay tax but at the same time others are found that they have to pay tax. Each case is looked at on its own merits. The following ruling from the Australian Taxation Office sets out what they look at in gambling income cases to decide if you are carrying on a business. If you are then you will be taxed.

That hasn't done much to stop Australian's spending big online, with $800 million spent by 2010. Accessing and using interactive gambling services is not an offence in Australia. It is also permitted for companies based in Australia to offer their services to gamblers located outside Australia. The only exception being those countries that were called ‘designated countries'. Australian punters benefit from not having to pay tax on their gambling winners. However, when it comes to online gaming, there aren't many Australian providers.

Since few are actually based in Australia, there is a foreign transaction fee that some users will have to pay to make a deposit or withdrawal. This is dependent on what kind of banking method you use.

For example, Mastercard and Visa will generally charge a foreign transaction fee. Whereas Skrill, won't charge one. There is also the issue of currency conversion. As some of the best casinos available might not offer the option to play in the Australian dollar.

All countries and governments have their own online gambling tax policies and legislation so we need to look at this question from a global perspective. Firstly we'll cover the situation in the UK and following that look at how things may differ in the rest of the world. Tips para aprender blackjack.

Do you have to pay tax on your gambling winnings?

UK Gambling Taxes

Key Points

• All winnings either online or offline are tax free!
• Any betting tax abolished in 2001 by Gordon Brown.
• Tax used to be on bookies but they passed to punters.
• Bookmakers must now pay 15% POI tax but not punters.
• POI tax on any games of chance increased from 15% to 21% but again not for punters.

In the UK any and all winnings from gambling – either online or at betting shops – are entirely tax free and do not need to be declared as part of any tax return.

This has been the case since the then Chancellor of the Exchequer Gordon Brown's budget of 2001, when he abolished Betting Duty which had stood at 6.75%. That duty was removed in an attempt to persuade bookmakers not to move their operations overseas and therefore take jobs and revenue away from the UK economy.

All of that is not to say that there is no tax involved when it comes to gambling in the UK, however, and there is a ‘point of consumption' tax related to the activity. This does not affect punters themselves, though, and will be dealt with separately further down this page.

Will the situation ever change? Generally speaking there is little chance that this situation will be reversed, either, as the UK tax system is simply not built in such a way that taxing gambling winnings would be viable. This is the case as it is fairly standard within the system that if tax is levied on the income or profit made through an activity, then there must also be an allowance made against losses through the same activity.

With gambling being an activity where overall more losses are made by punters than winnings, therefore, such a change in the tax legislation would cost the UK government revenue. As a result, it is quite simply not something which would be considered. Your betting, casino, slot machine, poker and bingo winnings are yours to keep tax free.

Do You Get Taxed On Gambling Winnings In Australia Money

What About Professional Gamblers?

It may seem logical that the tax situation would be different for professional gamblers than it is for occasional punters. When it comes to pure winnings from betting, however, that quite simply is not the case. As we have discussed above these winnings are not taxable and this remains true even for a ‘professional gambler'. That is because HMRC do not recognise professional gambling as a taxable trade.

In fact, within their most up to date ‘Business Income Manual', HMRC clearly define their position on professional gambling:

‘The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.' BIM22017

Gambling winnings, therefore, remain free of tax regardless of whether they make up an individual's main source of income. Where the situation can get a little more complicated, however, is in the case of income related to gambling but not actually direct winnings from gambling. Appearance fees paid to poker players for playing at certain tournaments, for instance, represent payment for a service provided to the tournament organisers and as such may be taxable.

Away from the UK, too, tax laws and legislation do differ and it would benefit a professional gambler outside of the UK to research the specific rules and regulations within their own country.

UK Point of Consumption Tax

As we mentioned earlier, Betting Duty for gamblers was abolished in 2001 and was at that time replaced by a 15% tax on gross profits for bookmakers and gambling providers. That tax was initially charged on a ‘point of supply' basis, meaning that if the bookmaker or company were not based in the UK, then they were not liable. This situation has more recently changed, however.

From the latter part of 2014, the tax on bookmakers' profits was changed to a ‘point of consumption' tax by a combination of the Gambling (Licensing and Advertising) Act 2014 and by the introduction of ‘Remote Gaming Duty'. This means that regardless of where they themselves are based, providers must pay a 15% duty on any bets placed by UK customers.

This has been the case since the then Chancellor of the Exchequer Gordon Brown's budget of 2001, when he abolished Betting Duty which had stood at 6.75%. That duty was removed in an attempt to persuade bookmakers not to move their operations overseas and therefore take jobs and revenue away from the UK economy.

All of that is not to say that there is no tax involved when it comes to gambling in the UK, however, and there is a ‘point of consumption' tax related to the activity. This does not affect punters themselves, though, and will be dealt with separately further down this page.

Will the situation ever change? Generally speaking there is little chance that this situation will be reversed, either, as the UK tax system is simply not built in such a way that taxing gambling winnings would be viable. This is the case as it is fairly standard within the system that if tax is levied on the income or profit made through an activity, then there must also be an allowance made against losses through the same activity.

With gambling being an activity where overall more losses are made by punters than winnings, therefore, such a change in the tax legislation would cost the UK government revenue. As a result, it is quite simply not something which would be considered. Your betting, casino, slot machine, poker and bingo winnings are yours to keep tax free.

Do You Get Taxed On Gambling Winnings In Australia Money

What About Professional Gamblers?

It may seem logical that the tax situation would be different for professional gamblers than it is for occasional punters. When it comes to pure winnings from betting, however, that quite simply is not the case. As we have discussed above these winnings are not taxable and this remains true even for a ‘professional gambler'. That is because HMRC do not recognise professional gambling as a taxable trade.

In fact, within their most up to date ‘Business Income Manual', HMRC clearly define their position on professional gambling:

‘The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.' BIM22017

Gambling winnings, therefore, remain free of tax regardless of whether they make up an individual's main source of income. Where the situation can get a little more complicated, however, is in the case of income related to gambling but not actually direct winnings from gambling. Appearance fees paid to poker players for playing at certain tournaments, for instance, represent payment for a service provided to the tournament organisers and as such may be taxable.

Away from the UK, too, tax laws and legislation do differ and it would benefit a professional gambler outside of the UK to research the specific rules and regulations within their own country.

UK Point of Consumption Tax

As we mentioned earlier, Betting Duty for gamblers was abolished in 2001 and was at that time replaced by a 15% tax on gross profits for bookmakers and gambling providers. That tax was initially charged on a ‘point of supply' basis, meaning that if the bookmaker or company were not based in the UK, then they were not liable. This situation has more recently changed, however.

From the latter part of 2014, the tax on bookmakers' profits was changed to a ‘point of consumption' tax by a combination of the Gambling (Licensing and Advertising) Act 2014 and by the introduction of ‘Remote Gaming Duty'. This means that regardless of where they themselves are based, providers must pay a 15% duty on any bets placed by UK customers.

In the 2018 budget chancellor George Osborne announced that the point of consumption tax would rise from 15% up to 21% for all games of chance but sports betting would remain at 15%, for now.

Gambling Taxes In The Rest Of The World

As the above table shows, where various types of gambling are legal there are a variety of different attitudes towards taxation on winnings from those forms of betting. If your country is not listed then it's likely gambling is not strictly legal and there is therefore no taxation laws.