REVIEW OF GAMBLING TAX RULES
Tax is the money imposed on individuals, companies, or organizations by the government of the country they are situated at and whose payment is compulsory. Failure to pay these taxes will be regarded as illegal and evading of taxes which is punishable under the law of the country.
About Gambling Tax Rules
Different country has its own tax rules regarding gambling. For players residing in the United States forty percent tax is attached to the gains derived from gambling. But players residing in the United Kingdom are exempted from paying any tax on top their winnings from gambling. In 2012, a tax was imposed on profits from gambling in which the players had to pay a tax of five percent. From this it is obvious that the rules on tax vary from one location to another. Majority of these rules imposed on gambling are only based on the gains not the payouts. This implies that for players that are required to pay tax will need to deduct their losses from their prizes before calculating the tax they will pay from the remaining money. For instance, in a case where your winnings after playing a game is five thousand dollars but you have lost four thousand dollars then the tax will not remove from the five thousand dollars. You will first need to deduct your losses and the tax will be removed from the money remaining which is one thousand dollars.
Benefit of Record Keeping
Keeping of records accurately is very important for any player if you win or you lose. For players that are playing at brick and mortar casinos it will not be hard to keep a record unlike those playing online. Also, the government will not find it hard tracking your progress at land based casinos unlike online based casinos. Therefore, to avoid any problem or paying more than the actual amount for tax, keeping record of every wager, loss, and wins. When you win it will be easier to deduct the amount you have lost when you keep record and you will not have to pay tax on your winnings. So, this is the benefit of keeping records accurately whenever you are playing at any casino.
Online Casino Players Payment of Taxes
As earlier stated, the government find it easier to track the winnings of the players playing at brick and mortar casino unlike those playing at online sites. Due to this, most online casino players do not pay any tax on their winnings. From the estimation carried out government should have been realizing billions of dollars as tax from the profits of players playing at online casino. Due to the difficulties involve in tracking the progress of the players online majority of the governments no longer bother about those unpaid taxes.
As an online player whenever you win and after deducting your losses you still have profits left then it is reasonable that you pay tax out of it. This is the law and law are meant to be followed unfortunately it seems like online players do not bother to abide by this rule since they cannot be charged.
For instance, an estimation was carried out some years ago that in case if Greece can obtain all the taxes from players profits after gambling online it will be sufficient to balance their deficits. However, upon all the effort to achieve this it was all futile endeavor. Talk more of a nation that online gambling is not recognized by the government like the United States it will be harder to receive tax payment from online players.
Online Casinos Payment of Taxes
Although the online players may fail to pay taxes but the online casinos, poker rooms operators, and sportsbooks cannot avoid not paying taxes. It is the jurisdictions of the online casinos that will determine where the taxes will be paid to. The country the online casino is operating from will imposed tax on it and it is from ten percent to twenty percent of its profit most times. For instance, ten percent tax was imposed on online casinos in the United Kingdom whereas it is twenty percent in Italy. So, this is mainly the means by which government profit from online gambling.
Apart from imposing taxes based on the profits of online casinos there is another way to realize money from online casinos and that is by licensing them. The government can be in charge of the licensing as well as some licensing body like Gibraltar, Curacao, Malta, KMT of Canada, Alderney, and so on. The money realized by the government of a country that grant online casinos licenses is a huge amount. The online casinos will be expected to follow some rules and regulations that will be spelt out to them by the government. Licensing will be carried out by the government of the country where the online casino is operating from which will be the main office location and the government will be responsible for sanctioning it.
Gibraltar, KMT of Canada, Alderney, and Malta are the nations or bodies that charge the largest amount for licensing and their license requirements are strict. From experience and experts in the gaming industry, any online casino that receive its license from any of the above licensing body will always be fair and reliable.
Tax Code of a Country
Understanding ones country tax code is paramount for casino players either online or brick and mortar based. In a situation when you are charge with the crime of evading tax being ignorant of its existence will not be an excuse.
For players that play at land based casino their winnings can easily be tracked in most cases when the winnings involve a huge amount of cash. However, because of the way some countries take gambling online and how complicated the internet is, it is hard to enforce the tax rules on online players. However, the online casinos cannot escape from paying tax to the government of where it is located physically.