Taxation of winnings in different countries

Why sort it out

Winning is income, but taxation rules vary widely across countries. Somewhere the player does not pay anything, somewhere he pays himself when submitting the declaration, and somewhere the tax is withheld by the operator/bookmaker when paying. Plus, many have special regimes for residents vs non-residents, and also different approaches to offsetting losses and winning cryptocurrency.

Five basic models for taxing winnings

1. "No Player Tax"

The player does not pay income tax on winnings (often because the tax is already set at the level of operators or games, or the state considers gambling winnings "untaxable" for individuals).

Typical features: there is no declaration on the fact of winning; no hold at source; exceptions for "professional activities" are possible.

2. "Tax as ordinary income"

Winnings are included in the tax base and are subject to personal income tax/income tax rates.

Often independent declaration is required, sometimes - preliminary withholding with a large payment.

Progressive rates and special reporting forms are possible.

3. withholding

The casino/bookmaker withholds tax upon payment (in whole or in part), transfers it to the budget and gives the player a confirmation of withholding.

Convenient for the state and for non-residents, but does not always close all obligations (in some cases, a declaration is still needed).

4. "Offset Losses"

In some jurisdictions, it is possible to reduce the tax base for winnings within documented losses (usually in the same tax period).

Often there are strict accounting rules and limits.

In other countries, such a set-off is prohibited: all winnings are taxed.

5. "Professional/entrepreneurial status"

If gambling/betting is considered as a systematic activity for profit, the player can be transferred to taxation as an individual entrepreneur/self-employed/entrepreneur.

Pros: you can write off costs and losses.

Cons: higher load on reporting and insurance premiums.

Regional accents (not tied to rates)

Europe: the spectrum is wide - from the complete absence of tax from the player to the inclusion of winnings in the income tax base with the possibility/without the possibility of offsetting losses. There are countries with tight control of non-residents and mandatory retention at source for large amounts.

UK: A classic example where players typically pay no income tax on winnings and the fiscal burden is shifted to operators.

North America: often a player is required to declare, there is a withholding at the source for individual types of winnings and amounts; offsetting losses is possible, but strictly documented.

Australia/New Zealand: For amateurs, winnings are generally exempt; professional play may be interpreted differently.

Latin America: Mixed Modes; a number of countries apply source hold (especially for lotteries/prizes), sometimes different rules for online and offline.

Asia: there are jurisdictions with direct income taxation, there are - with withholding at the source; lotteries and horse racing are separately regulated in some countries.

Africa: Diversity of Approaches - From Source Retention to Inclusion in the Common Declaration; often the rules differ by type of game.

💡 Important: residents and non-residents are often taxed according to different rules - non-residents are easier to "hang" retention, and residents are often obliged to declare total income.

What about cryptocurrency and NFT prizes

If the winnings are paid in cryptocurrency, in most countries it is interpreted as the value in fiat on the date of receipt.

In the subsequent sale/exchange of the crypto asset, a second taxation event (exchange gain/loss) appears.

Some regulators require KYC/AML confirmation of the source of funds, as well as wallet history for large amounts.

When exactly is it worth preparing a declaration/documents

Large single winnings (lottery, jackpot, tournament).

Regular game with a noticeable total winnings for the year.

Crossing borders (you played/took out in another country or are a non-resident where you played).

Payment in cryptocurrency or transfer to a foreign account.

Transition to the category of "professional activity."

What documents to collect in advance

Extract from the personal account of the casino/bookmaker: deposits, bets, winnings, conclusions (for the period).

Payment confirmations: checks/statements of PSP, bank, wallets.

Tournament/lottery reports: confirmation of the fact of winning and the amount.

Crypto extracts: transactions from the blockchain explorer, wallet analytics reports (if necessary).

Confirmation of withholding tax withholding (if withholding): useful for offset/credit in the country of residence.

Mini Calculator (Universal Logic)

Denote:

'W'is the winning amount (in fiat on the date of receipt),' T _ src'is the withholding tax (if any),' τ 'is the income tax rate in your country,' L'is documented losses (if your regime allows offset and within the rules).

Then the benchmark for calculating tax for an independent declaration:

If offset is allowed: taxable base 'B = max (0, W − L)'; tax'N = τ × B − credit (T_src) '.
If the offset is prohibited: 'B = W'; 'N = τ × W − credit (T_src)'.

💡 A number of countries apply withholding credit within bilateral double tax treaties.

Frequent pitfalls

Mixing jurisdictions: played on site A, received a payment on a wallet/card in another country - two sets of rules appear at once.

Unconfirmed losses: without payment reports and operator's office, offset is often impossible.

Crypto volatility: the winnings were calculated at one price, the token was sold later at another - an additional tax result arose.

Non-resident status: may include mandatory deduction and prohibition on a number of deductions.

Professional status: a series of stable winnings, an active strategy and volumes can lead to a reassessment of status and a different tax base.

Practical advice to the player

1. Keep the entire history: operator reports, checks, statements, screenshots of transactions.

2. Check the rules of the country of residence: it is there that the obligation to declare most often arises.

3. Specify the scoring mode: is it possible to take into account losses and in what volume.

4. Keep track of the crypto date of receipt: fix the rate and value at the time of winning.

5. Plan conclusions: it is better to accompany large amounts with documents in advance (source of funds, confirmation of deductions).

6. Avoid third parties: cards/wallets of relatives create tax and compliance risks.

7. In case of doubt: check your actions with local regulations and agreements on the avoidance of double taxation.

FAQ (short)

Do I have to pay tax if I won abroad?

Often - yes, at the place of your tax residence; withholding from a source abroad does not always close the question.

Is it possible to "offset" losses?

Depends on the country. Somewhere it is possible within a year and with strict document flow, somewhere it is impossible at all.

Who pays - me or the casino?

There are both options: either retention at the source, or an independent declaration. Sometimes - a combination.

Is crypto winning the same?

In essence, yes: this is fair value income on the date of receipt, plus possible subsequent capitalization/loss on sale.

And if I'm not a resident?

Often, withholding and/or special rates apply; credit rights are limited. Check local rules and double tax treaties.

There are four key axes in the world that determine how much a player will pay:

1. whether the player has tax or the fiscal burden is entirely on the operator;

2. Whether source hold is applied

3. whether the offset of losses is allowed;

4. how cryptocurrency payments are interpreted.

Understanding your residency, being able to collect documents and knowing the basic model of your country removes 90% of the risks. The remaining 10% are nuances (large sums, cross-border and crypto), which are solved by planning and careful accounting.