Like all other income, winnings at the bookmaker’s office are taxed, which is paid either by the bookmaker or by the player himself. Legislation and tax rates in this area are constantly changing, new rules have been introduced since 2018.
Let’s figure out what tax the player has to pay on winnings at the bookmaker’s office and how to do it.
Is the winnings taxed at the bookmaker’s office?
Winnings at bookmakers in most countries are classified as income of an individual. Formally, they were always required to pay taxes. But in some countries, over time, more detailed laws began to appear in relation to the betting activity and the income of their players. For example, on January 20, 2014, an amendment to Article 214.7 of the Tax Code came into force in Russia. The following provisions appeared in it:
- To calculate the income base, the amount of the deposit is deducted from the winnings. The resulting figure is taxable. But there are laws requiring taxes to be paid on the entire amount; what policy a particular bookmaker adheres to, you need to find out from the administration of each office.
- The obligation to pay has passed to the bookmakers. Previously, the player himself had to deal with the calculation and declaration of the required amounts.
- Since then, the tax rate on winnings is 13% for residents of the country and 30% for non-residents.
On January 1, 2018, the Federal Tax Service and the Ministry of Finance published new conditions. According to their letter, the obligation to pay may fall on the player or the bookmaker, depending on the amount of the winnings.
- Winnings up to 4000 rubles are not taxed on winnings
- If the winnings are in the range of 4000-15000, then the player must pay
- If you win more than 15,000 rubles, the bookmaker itself becomes a tax agent and it is responsible for calculating the amount and paying taxes.
- You need to declare income for the current year by April 30 of the next, and pay by June 15
- The amount of the collection remained at the level of 13%
These rules apply both for online bookmakers and for winnings at offline betting points.
For example, you can take a player who made a deposit of 10,000 rubles, and later, as a result of successful bets, increased them to 30,000. When withdrawing this amount, the bookmaker will calculate the tax base as the withdrawal amount minus the deposit. It will be equal to 20,000, from which 13% or 2,600 rubles will be deducted.
All information about replenishment of the account in the bookmaker and withdrawals from it is stored in the Center for Accounting for Interactive Betting Transfers (CUPIS). From there, the tax office can obtain data on each client of a legal bookmaker.
These rules apply only to legal bookmakers who have received a Russian license and operate in accordance with the laws of the country. But is the bookmaker’s winnings taxed if the bookmaker has not received a license? In this case, the player still has the obligation to pay. Formally, non-payment of taxes on such a prize would be a violation of the law.
The state can find out about this income only through banks or licensed payment systems like Yandex.Money or Qiwi. They are not obliged to transfer data about transfers to government authorities. But this information can “surface” during a tax audit or legal proceedings. For the first time, the player faces a fine of 30% of the amount he has hidden for non-payment of taxes. If the hidden taxes on the winnings amount to more than 3 million rubles, then their non-payment is considered a criminal offense.
When withdrawing money from an account in a foreign bookmaker’s office, it will not be possible to calculate the taxable base as the difference between a deposit and a withdrawal. Taxes on winnings at the bookmaker’s office will have to be paid on the entire withdrawal.
Self-payment of taxes
If the player has earned less than 15,000 rubles, then he must calculate the amount himself. All legal bookmakers transfer information about the winnings of their clients to the tax authorities, so if the player does not pay, problems may await.
In order to report the received prize, you need to go to your personal account on the website of the Federal Tax Service. There is also an option with sending the declaration by mail or filing personally with the inspection. For printing, you must use a special application from the tax website. When drawing up the declaration, it is necessary to indicate that the prize was received from activities with the risk of loss. Otherwise, it will be qualified as a prize from risk-free games, and the rate under this article is 35%.
Not all bookmakers reacted positively to the changes, which obliged customers to pay their own taxes on small winnings. They are confident that this will create additional difficulties for the players and push them to choose an illegal company for the game. It is more reasonable for bookmakers to pay all fees by the betting operator, regardless of how much the client won.
The tax rate paid in Russia is one of the lowest in the world. For example, in Poland, the state takes 18% -32% of the winnings. In Greece this figure is 20%, in Romania – 25%.
In Belarus, the tax on winnings at a bookmaker’s office in 2020 is 4%. Until some time, the rate, as in Russia, was 13%, but due to the outflow of players to unlicensed foreign offices, the state lowered it.
Bookmaker Tax Compensation
The laws do not include requirements for bookmakers to reimburse player tax expenses. But some companies are finding loopholes to minimize customer losses. For example, Fonbet declares a lower amount of winnings, writing off the rest to rewards and promotions.
At the 888 bookmaker, you can receive the amount of money paid from the winnings with bonuses to your account. This is done in order to deter players from going to illegal bookmakers.
The bookmakers themselves also pay taxes on their profits. Additionally, the state obliges them to transfer money, which is then spent on the support and development of sports. Especially high fees are paid at land-based betting points, in addition, there are processing fees for processing transactions. The money is transferred annually to the self-regulatory organization of bookmakers and the compensation fund. From it, the losses of players from bankruptcy or bookmaker fraud can later be compensated.
Problems with paying taxes
When calculating taxes and establishing rules for paying money from income from rates, 4 laws are applied, which partially contradict each other. Some of them say that the tax should be calculated from the entire amount of the winnings, according to the provisions of others, the tax base should be the amount of the winnings minus the deposit. The State Duma reports that they are aware of the existing problems and promise to release new, more understandable requirements in 2020.
If a player wants to receive a personal income tax certificate about his winnings, then he needs to send a corresponding request to each bookmaker in which he played. Many players who practice sports betting professionally have accounts and place bets on a variety of sites from time to time. This creates problems in obtaining documents.