Do you have to pay tax on winnings from online casinos?
Germans are subject to many different taxes: Income tax, inheritance tax, trade tax, property tax and so on. However, as far as the profits in online casinos are concerned, they are treated generously.
The taxation of these winnings is usually waived. Players do not need to fear any deductions. Gross is paid out as net. Thus casino players are treated better than sports betting winners. These pay five percent tax on their wagers. Winnings from games of chance are generally assessed separately. Accordingly, winnings from lotteries are also paid out in full and tax-free.
The view of the tax office
So you can visit the best online casinos and dream of great riches. If you win, however, you will find that it is not possible to make a blanket assumption of tax exemption. Various backgrounds play a role here for the tax office. Casual players need not fear a tax on their winnings, even if they regularly play several hours a week in an online casino. There is a taxation only in various exceptional cases.
One hears again and again that poker players go to court because of levied taxes. This is because the tax office wants to see regular winnings taxed, because it considers them as income. An example: If the customer of an online casino regularly plays blackjack, he may acquire a small fortune. If the winnings per year exceed half of the regular income from gainful employment, the player is obliged to pay income tax on the winnings. In the case of a one-time large win, however, this remains unaffected by the tax and does not have to be declared as income.
As a general rule, winnings from games of chance do not fall into any of the seven types of income defined by law. They are also not taxable gifts. Therefore, neither income tax nor gift tax is due.
However, if these winnings are invested so that they generate a return, this capital gain is of course taxable. The tax office levies a capital gains tax on it.
In Austria, similar regulations apply: Winnings from gambling are generally tax-free. This applies to all online casinos that have a license in Austria and all games that are offered in the casinos.
Who is a taxable professional gambler?
For example, there is a definition of a professional gambler, who thus becomes liable to pay taxes, in Germany. There one speaks of a professional gambler, if he makes regular profits, so that one must assume ability. Such an expert, so to speak, performs a self-employed activity when playing in a casino. However, this definition is controversial and the subject of many court cases.
Special cases with casinos from abroad
As far as taxation is concerned, when gambling on the Internet, one should take a closer look at the casinos and see where they are headquartered. The licenses of reputable casinos result in tax advantages for the players. There are many gambling licenses issued in Schleswig-Holstein and thus fall under German law. When playing at foreign casinos, the state in which the company is based can levy taxes on the winnings.
In any case, the operators of online casinos must pay taxes. Some of them pass these taxes on to the players in the form of fees.
If a gambler becomes taxable through regular winnings, this tax liability is linked to his residence. So he has to pay it off in his home country and not at the location of the casino.
There is an exception if a casino does not have a license in the EU. This case is very rare. However, if it occurs, the winner may have to pay a capital import tax when importing the winnings into the EU. This tax does not depend on the origin of the money.
That's how I remembered it, that you don't have to pay taxes on winnings from casinos and of course online casinos, because it's gambling. I also find good, because you have the money that you take as a bet, already taxed and then again tax on it … at some point is then also times enough.