Sunday, 20 September 2020

Are Casino Winnings Taxable?

Are Casino Winnings Taxable?

Casinos can be a money-making center if you can play smart and responsibly. A plethora of ways can help you beat the casino and take home enough money to last for a long time. However, what happens when you win a jackpot from a casino? How do you state that money to the income tax department? What is the procedure followed? Do you mention that amount in the blue books, or is it taking the entire sum and putting it under your rug? To know about the answer to these questions, read below. 

Taxation in different countries

Well, in some countries the amount is not taxable, while in others it is. It might also change from state to state in a single country, so you need to know about the rules and confirm them with the casino where you are gambling. E.g. in Scotland, Northern Ireland, and England, you need not pay even a single buck from your winning amount, while in others like India, you have some regulations regarding gambling tax. 

The reason why the UK does not levy charges on casino billings is that their HM Revenue and Customs department generate enough amount to thrive and make a large profit from it. So, they don’t find it suitable to get some share from money won with some luck. However, other countries are not so rich and they need to run the government using all the resources they could, and therefore, gambling is taxable there.

However, the casinos have to pay taxes depending upon the rate applicable in the country irrespective of the mode of casino i.e. online or offline. It is 15% in the United Kingdom and 24% in the United States of America. 

Online casinos and taxes

With the world taking a digital turn, casinos also transformed itself and established themselves over the world wide web. Most of these casinos operate outside the country, and this makes it tedious to charge taxes from these servers. However, the commissions in the countries have come up with a solution. They are now charging their standard charges from the casinos who want to be licensed and if the casino is not licensed in the country, it can’t operate.

If you are a professional gambler based in UK or USA, you need to make sure you comply with these tax regulations, else that money you won can turn into dust if IRS gets its hand on it.

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