Tax, tax and more tax

Poker Web Watch / Dave Allan / 15 September 2009 / Leave a Comment

There is a saying that says only two things in life are certain , death and taxes. Whilst there no real laws regarding death, the laws on taxes, especially gambling related taxes, vary greatly from country to country.

Here in the UK we are lucky that we do not have to pay any tax on our gambling winnings and this includes internet poker. This was not always the case, in fact until March 2001, anyone placing a bet in the UK had to pay either 9% tax on their stakes or 9% tax on their winnings.

Whilst this created significant revenue for the government, it also saw a large number of serious and professional gamblers taking their business overseas to avoid paying these taxes. Fast forward to today and it is the gambling firms that pay tax on their gross profits and not the punters.

We Brits are often found moaning about the amount of tax we pay, be it on a pint of beer, a litre of petrol or the VAT we pay on almost everything. However, we could have it much worse. We could be Danish poker players!

Denmark is well-known for having some of the highest tax rates in Europe and this especially applies to profits from gambling. You may remember that a certain Peter Eastgate became the youngest-ever Main Event winner when he outlasted 6,843 other players to win around $9,100,000 in prize money.

Anyone winning this sum of money would be delighted but by the time he had paid his taxes he was left with closer to $2,500,000, still not shabby but a significant difference from what he actually won. He was taxed 45% for the first $4,000,000 and then a mammoth 75% on the remaining balance!

The Danish legal system recently came down hard on a 35-year old man who was claiming to be unemployed but had allegedly been playing online poker and had won close to €26,000 in doing so. He was initially fined the sum of 5,000 Danish Kroner but this was later rescinded when he was ordered to pay €11,700 in taxes on his winnings instead.

My fellow Brits have legitimate reasons for being unhappy with the amount of tax we pay, but my fellow British poker players should thank their lucky stars we do not have to pay ridiculous rates of tax on our winnings.