Gambling: Profits are not always tax-free

Are you aware that profits from gambling do not have to be taxed at least most of the time? In which cases, taxes can be due.

First of all, the good news is that any person who makes winnings from games of chance especially over the internet does not usually have to pay tax on them no matter how high the winnings are.

Interest on profits is taxable

On the other hand, the lucky ones have to be careful and vigilant when the money arrives in their account and pays interest. Then the profits are subject to the flat tax, currently 25 percent in Germany. This income must be declared and taxed at the tax office. You must find the flat tax when it comes to gambling in your country.

Different regulations for lotteries abroad

Any person who uses offers from other foreign lotteries should find out about the tax situation in the respective country ahead of time. Because here applies: The state in which the lottery is located can set the taxes for the winnings.

If you are into casinos without account over the internet, it is always advisable to check their rules and guidelines in advance so you can know the laws applied in that certain game you want to play.

Internet gambling: winnings can be confiscated

In the case of games of chance on the Internet, the provider must also have official permission to organize the game of chance. If this is not the case, the proceeds can even be confiscated by the government and a fine can be imposed. It is not worth the try at all if providers will have to pay fines and be banned in the online gambling industry.

When do profits have to be taxed as income?

If the rain of money is directly related to one’s own work, the tax office can assign the profits to any of the types of income. In that case, the prize money must usually also be stated in the income tax return. This relates, among other things, to artistic, scientific or journalistic awards, for example, prize money for an architectural competition, a film or a literature prize.