Taxation of winnings in EU countries?

I think that it is best to consult a taxation specialist for the country itself.

GG poker is licenced in Isle of Man, which is not EEA (ETA, Euroopan talousalue in finnish). Therefore profits are taxable. Olybet, a skin in GG network, is licenced in Estonia, which is EEA country. Therefore all gambling profits are tax free.

Hi Khiiniau. You are best to get advice from your local tax advisor. These matters can change from one country/region to another.

Khiiniau what country are you from?

I can speak specifically for the United Kingdom (and although Brexit means we left the EU, we haven't yet changed any of our laws. I've always worked under the assumption that what applies in one member state applied in the other 27 - there were very little, if any, differences, and virtually none economically - the only way EU countries tend to differ is how they practise criminal law and how the judiciary, and by extension police force function).

So, simply put, you cannot be taxed on income you have not earned. The two main forms of income for moat people would therefore be via employment, or via investment.

I won't bore you with further details, suffice to say that money gained via gambling is not classed as income, but rather as competiton winnings.

There is a specific exemption in UK tax law for games of chance (and since London was the financial centre of the EU, I cannot see why the EU would have reversed this in the 18months since we left). I do not have the relevant code/page offhand to refer you to, but the winnings from games of chance cannot be taxed - conversely, that means that losses from games of chance cannot be offset against tax!

And that last line is key as to why this will NEVER change. More people lose than win. As much as you hear so-and-so being a profitable player, the reality is most are losing player a without a side hustle, a sizable minority might break even, and the small remainder are profitable, sometimes massively so. Allowing those break evens to offset loses against tax liability suddenly pushes them into profit. Sorry, tax man says no.

The UK will never want all those losing gamers suddenly offsetting their loses against tax liability and costing the treasury dearly.

This is why there is no such thing as a "professional poker player" in Europe. Certainly not professional gambler.

Lottery winnings - not taxed.
Any competition entered - Not taxed.
Games of Chance winnings - Not taxed.

Back in the 1980s, I seem to recall a small tax being applied to the stake of any bet placed in a licenced bookmakers. This was abolished before I could legally gamble and it would not suprise me if it was done so because of/in preperarion for the National Lottery, which began in 1994 when I was 16 (the one and only time I ever bought a ticket, for that first draw 😂)

Remember this simple rule and you'll probably see yourself right - Earnings taxed, winnings kept

Originally posted by Kyyberi
GG poker is licenced in Isle of Man, which is not EEA (ETA, Euroopan talousalue in finnish). Therefore profits are taxable. Olybet, a skin in GG network, is licenced in Estonia, which is EEA country. Therefore all gambling profits are tax free.

You're confusing company tax law and individuals tax liability.
GG Poker is not liable for being taxed by EU memebr states (and I include the UK), being a foreign registered company whose operations are taking place overseas.

Now, unless they (government) manage to come up with some scheme whereby the client software acts as the place at which contract is entered into and as such suddenly domestic liability is possible.

Individuals liabilities
See above for my detailed explanation, but people are not, nor will they ever be, taxed on the "profits" made through games of chance, of which Poker is classed as. The game of Poker even has a definition, beside being classed as a game of chance. Because there are so many variants, they have summarised it to be - and I paraphrase:
- Poker is a game of chance, not unlike brag.
- card game whereby score is kept by the use of money, or chips/tokens representative of money.
- Wagers may be made at various points during a specific deal, or hand, and before all cards have been made available.
- Players are wagering both on what they have already AND/OR on what they hope to make.
- Participant's have to make their best 5-card Poker Hand from all cards that have been made available to them.
- The best hand [usually] wins.

As with other games popular in public houses, games where participants make wagers based upon incomplete information are classified as GAMES OF CHANCE

Whilst I define poker as a game of skill where players make wagers based upon incomplete information, the government(s) stole my bangin' phrase and made it shit🤣

I think Khiinau is from Finland, where it's simple. All gambling winnings inside EEA is tax free, all gambling winnings outside EEA is taxable. Olybet is inside EEA, GG Poker is not. And we have tax office's verdict on this.

Originally posted by Kyyberi
I think Khiinau is from Finland, where it's simple. All gambling winnings inside EEA is tax free, all gambling winnings outside EEA is taxable. Olybet is inside EEA, GG Poker is not. And we have tax office's verdict on this.

Thanks for that clarification! Helpful for me too... and Isle of Mann is indeed outside of the EEA, even when UK was a full member state of the EU, Isle of Mann is a crown dependency and part of the British Isles but not a political part of the UK.

FWIW I'm 25% Manx 😊 my Nanna was born in Peel. I always remember, growing up, her kitties had no tails!

If you have advice from Tax office then that's going to trump any advise I can (and had) offer(ed).

But whilst it might not apply to the OP, most EU member states legislate as the UK. I wonder, has Finland changed the definition of Poker then, so that it is a game of skill?

In the mid 2000s a number of card rooms in the UK were under investigation (2005-ish* when Gutshot Poker Club was raided by Met Police and HMRC) - now the big problem for them was whether games were being raked.

They weren't so interested in players but rather the private members clubs that provided the games. However, at the same time they, the card rooms, launch a judicial review challenging HMRC verdict that Poker is a Game of Chance asserting that they believed it to be a Game of Skill, like other games commonly played in public houses and private clubs - snooker, darts, pool instantly spring to mind. Poker was lumped in with the dominoes, gin rummy, and cribbage and branded with the notion that all card games are games of chance.

Ultimately they were not successful - the main reason for keeping the status quo was because the tax implication (burden) was just too great! Thousands of gamblers suddenly submitting tax returns, writing down their Poker loses and claiming all sorts of business expenses they were not otherwise entitled to).

If you take a look at Gut Shot Wiki page, you'll see reference to 16 January 2007, when club owner was convicted of contravening the Gaming Act. The jury in the case rejected Derek Kelly's contention that poker was a game of skill.

A club in Scotland also went through a similar experience, being raided by the Gambling Commision with an entourage of HM finest heavy handed Scottish Police in toe😂

* as I say, this was in the Poker boom after Moneymakers WSOP win and interest in the game exploded

No, in Finland poker and sports betting is treated as gambling. We have national monopoly Veikkaus. And as all winnings from Veikkaus are tax free, then all gambling winnings inside EEA need to be tax free.

Our monopoly might change to licenced system in few years, and that might change the whole situation. But for now, due to our monopoly all gambling inside EEA are also tax free.

Originally posted by Kyyberi
No, in Finland poker and sports betting is treated as gambling. We have national monopoly Veikkaus. And as all winnings from Veikkaus are tax free, then all gambling winnings inside EEA need to be tax free.

Our monopoly might change to licenced system in few years, and that might change the whole situation. But for now, due to our monopoly all gambling inside EEA are also tax free.

Yes I'm from Finland and this is how I also understand it.

Problems in Finland comes in situations where servers are in one country, license is from another country, and company HQ are at third country. Which one is counted? Luckily, we have pretty good customer support from tax administration and they help if you are not sure. Also staking creates some problematic situations, as the money you get from staker is not gambling winnings. Here is tax administration's newest quite to poker taxation: https://www.vero.fi/syventavat-vero-ohjeet/ohje-hakusivu/47917/pokeritulojen-verotuksesta2/

It answers to all questions for Finnish players.

edit: I have quoted and split Kyyberi reply into two sections, and replied to each of his paragraphs seperately.

edit 2: I see Kyyberi added a 2nd reply on 11-Oct-2023 9:20 BST, which I hadn't read whilst writing my answer to his 10-Oct-2023 post (since the forum takes you straight to the first un-read post in any thread you open, and so I've also added this quote too as it is also relevant to my answer anyway! I added this third one at the very bottom, IE at the end of my previously unedited post.

Originally posted by Kyyberi on 10-Oct-2023 at 07:53 BST:
No, in Finland poker and sports betting is treated as gambling. We have national monopoly Veikkaus. And as all winnings from Veikkaus are tax free, then all gambling winnings inside EEA need to be tax free.

Interesting - as I suspected, gambling cannot be classed as taxable (at least within EEA as you say) - and as most gamblers are losers over the long haul, the government would actually LOSE revenue, not gain!

Reason? Any taxable business can offset loses against their tax debt. And since income earned outside of PAYE (or your country's equivalent) would have to be entered on your annual tax return, you're a business. Any individual submitting a tax return would be classed as self-employed, even if they are also a salaried employee elsewhere. Non PAYE income would go on the tax returns whilst PAYE earnings would not, since the employer already submits that for you.

PAYE?
Pay As You Earn, a UK tax collection scheme that covers 99% of working people; an employee does not need to submit an annual tax statement*, your employer does it for you, collecting tax owed on behalf of the government by deducting the amount from each pay check according to that employee tax code. 1257L would be the tax code for any salaried employee earning less than £50,271 per year).

* assuming of course that said.employee does not gain additional income via other sources during the tax year in question. Examples where you would need to declare are inheritances above a certain value, interest earned on savings above the allowed threshold, etc. Gambling is not one one of the incomes that need to be declared, as I said, because most gamblers would be recieving a tax return check from the tax man each year for the over payments they've made on their salary.

The real reason(s) winnings aren't taxable
It's interesting though that you say the only reason they're not taxing poker & sports betting is only because the national lottery winnings are tax free. I don't doubt your sincerity making that statement, but I do doubt whether that is in fact the real reason.... it might be the stated reason, since it's far easier to say "oh, it is because our national lottery is tax free that we have decided not to tax other forms of gambling." than to admit the truth that its because they simply don't want the treasury to suffer overall net losses.

Incidentally, were they to change their minds, taxing the national lottery winnings wouldn't incur the net loss in tax that I described for poker - lottery winnings are massive in comparison to it's entry fee. And whilst most lottery players are also losers, because the entry fee is so insignificantly small (especially compared to winnings) that the losses of someone playing the lottery wouldn't be worth offsetting against tax debt. Also, if loses could be offset against tax liability then players would have a major incentive to buy hundreds of lottery tickets each week, knowing that it's effectively free (as long as they owe enough tax to offset against).

Originally posted by Kyyberi on 10-10-2023 at 07:53 BST:
Our monopoly might change to licenced system in few years, and that might change the whole situation. But for now, due to our monopoly all gambling inside EEA are also tax free.

Now, how does that apply where the registered office of the online poker site you're playing at is registered in a non EEA country? Are any winnings earned by you in that country, or (and I suspect the latter) earned in the country from which you connected to said online site? IE is the income earned at the point of the client applications connection, the originators IP address, or is it earned at the server the client application is connecting to, the destination IP address.

I suspect this has never been tested in any court of law and probably for very good reason. Technology moves very fast and the law is struggling to keep up with advances in technology as it is, let alone adding more cases to their workload. I would argue that a decent civil lawyer, probably accompanied by a decent chartered accountant, could put together an extremely good case for claiming that you made your income in the country you connected FROM (if your poker client connected via your PC/laptop or smartphone within Finland, then you earned that money in Finland. And therefore you earned it within the EU, let alone the EEA).

Sports betting may be different, especially if you're using exchanges like Betfair - in which the client's are the both bookmakers and the bettors. Betfair just facilitates individuals' ability to both back and lay - and since said wagers are between individuals and not the exchange, is the country of origin the layer or the backer? Or is it just the country of whomever wins! It cannot be the exchanges country, since they aren't paying you - they're collecting on your behalf and taking a cut for the privilege. Then again, isn't that partly the definition of a bank? And it's hard to argue that holding an account with an offshore bank account should be classed as a domestic account just because you're using an app to manage the offshore account that's connecting from Finland IP address...

My brain hurts!!!

Originally posted by Kyyberi on 11-Oct-2023 at 09:20 BST:
Problems in Finland comes in situations where servers are in one country, license is from another country, and company HQ are at third country. Which one is counted?

Oh, you also picked up on the issue I described in detail above! I like my answer better, but yours is much more brief, yet straight to the point! Kudos - I have non-specific ASD (formerly known as aspergers) and ADHD though, so asking me to be brief is akin to asking Mo Farah to win an olympic medal in a 100m event, Usain Bolt to win a commonwealth medal in a marathon/10k. Or asking Donald Trump to become a liberal and not to be a misogynist womanising right-wing nutjob. It just isn't within their ability or capability. It's not their fault, it's just how they're built, brought up, and it's just how my brain is wired. The official term for me is neuro-divergent. Someone not on the spectrum, or low down the spectrum, is known as neuro-typical. I digress...

Originally posted by Kyyberi on 11-Oct-2023 at 09:20 BST:
...Also staking creates some problematic situations, as the money you get from staker is not gambling winnings...

Wow, it's like you read my mind or something! Again you're rather more to the point compared to my verbosity, but this pretty much sums up my example of how I suspected betfair would be treated.

Originally posted by Kyyberi on 11-Oct-2023 at 09:20 BST:
Here is tax administration's newest quite to poker taxation: https://www.vero.fi/syventavat-vero-ohjeet/ohje-hakusivu/47917/pokeritulojen-verotuksesta2/

It answers to all questions for Finnish players.

Brilliant, thanks for this! I'll make a point of adding this to my reading list - might even make a start on it tonight..

I'm not a Finnish player, but (and this is another symptom of someone with Aspergers or other high-functioning autistic conditions) I'm obsessive when it comes to reading and digesting as much information as I can that relate to my hobbies and interests.

Whilst that can be true of many people who have hobbies, where neuro-divergent folk differ from neuro-typical is that the neuro-divergent is driven to learn as much as they can that relates to their chosen interest, even if it has nothing to do with them, or the things they may own.

I'm not Finnish, this guide will not relate to me in any way shape or form, but since it does relate to one of my obsessions, I must* read it. I must learn it, even if it takes me all night (and I will stay up to do this - because its a compulsion and I will not sleep now anyway, because I know there's something new I need* to learn).

* in this context, a must, or a need is a specific compulsion that means there's something that must be fulfilled. Train spotters are often neuro-divergent, and will be able to recite the fleet numbers of all the 314s and 320s in service on the Argyle & North Clyde line. Such as the 320116 or the 314069 - the 320s are the ones with the slanted front "face" and the 314 is basically an identical loco, but with a flat "face". They'll be able to tell you which locos they've spotted.and know (usually without looking at their list, but they'll still have written that list) which ones they've not seen yet.

Now, I'm not a train spotter, but I bet you can tell I do have an interest in trains. ASD people tend to go off on total tangents unrelated to the conversation at hand l in order to explain to you their chosen interest. They'll find it hard to pick up on the non-visual cues that the listener has gotten bored,.but too polite to tell them they're not interested. Tip - if this happens to you, they probably won't be offended if you interrupted to politely think them for explaining something you didn't know, but because you're in a rush you need to end this discussion now. You could also add that you're impressed by their knowledge of the subject but it's not something that you are personally interested in, and they'll get the message.

• Neuro-typical need: A greedy person needs a MacDonalds because they want one.
  Or a hungry person who needs a MacDonalds because they're hungry and would die if they dont eat.
• A neuro-divergent need: A person who needs a MacDonalds will sit and read every single item on the menu, including waiting for the scrolling screens to show every item until it goes back to the beginning, and would then be able to recite each item, and it's price if they are also lucky enough to have an eidetic memory, any any discounts that may apply such as meal deal price vs burger only price.

You posted a bloody article relating to my obsession. I'm.high functioning, which means, among other things, thay my IQ is above average or better compared to the general populace. A classically autistic would often be classed as low-functioning - the boy in Mercury Rising "Simon is home" is low functioning. That's not not to say he's stupid, either. Give him a puzzle and he'll solve it in seconds. It's not as simple as a measure of IQ. Rain man. Low functioning, but also a genius. Being unaware of your condition can be a marker of low functioning.... not that high functioning is not without its problems. In my case, it meant that I have gone undiagnosed for 30+ years of my life. I was classed as weird and bullied. Or considered a naughty child at school and punished accordingly. When the simple answer was that I had finished my hours worth of work in 5 minutes and was now getting bored. Having co-morbid ADHD then meant I was easily distracted by other pupils, and too socially naieve to realise they were doing it to get me into trouble with the teacher deliberately! So a high functioning person develops coping strategies to fit in with what they eventually learn is expected behaviour. It might not feel natural for them (for my it causes severe anxiety) but they do it because they've learned that's what they're supposed to do, and fitting in stops (or.eases) the bullying.

The fact that I am aware of my condition does nothing to ease my emotional distress if I ignore that need. Thanks! 😂😭 It's not your fault.

I'll read your article. Sorry I turned this into an explanation about my autistic traits! I've gone and combined an answer to your post with another post I'm writing on another forum (one that is for folk with ASD and their families and I'm using this thread as an example of certain traits they can look for in their son that they suspect might have the same or similar condition).

In EEA you have to treat all providers the same. It's not possible to keep Finnish winnings tax free, and tax other EEA winnings.

Also, tax is payed yearly from profits, so losing players don't pay taxes.

I have worked in our monopoly and I have worked on game providers side. And I have worked on central that focuses on gambling addictions and monitos how our monopoly follows the rules and regulations.

The whole situation in Finland is really f***** up. In general over the decades monopoly has created a system where most politicians and people with power benefit monetary from the monopoly. Those are the ones who also decide, whether we have monopoly. As they get money from monopoly, they are keeping it running.

Qith the internet the pressure is building, as normal people start to see how twisted the system is. The problem in licence system is that most likely winnings become taxable.

Originally posted by Kyyberi
GG poker is licenced in Isle of Man, which is not EEA (ETA, Euroopan talousalue in finnish). Therefore profits are taxable. Olybet, a skin in GG network, is licenced in Estonia, which is EEA country. Therefore all gambling profits are tax free.

A fellow Finn here. If you go to fi.ggpoker.eu and scroll to the bottom of the page, it says that ggpoker.eu is registered in Malta, which is part of EEA, correct? Doesn't this mean that winnings are not taxable in Finland? They have had this license for several years now (according to Wikipedia). Or have I misunderstood something?