The truth is taxes can take a huge chunk of your gambling winnings. This leaves you with less than you wanted to take home. Many countries tax gambling winnings but with some exceptions. In countries across the EU, you can find some that are tax-free and others that have certain exceptions to taxation.
Sweden, Denmark, and the UK have different laws when it comes to taxation for gambling winnings. It’s important to familiarize yourself with all of them before you join any gambling sites. Understand what tax rules are there in terms of your winnings to determine how much you expect to have.
An example to consider is the UK. Across the EU, this is one of the biggest players in the gambling industry. It controls much of the online gambling activities taking place across the region. There are both online and land-based casinos frequented by millions of players every day. No tax is levied to players meaning all your winnings are yours to keep. However, licensed casinos operators have are taxed to the tune of 2% to 4% of their gross revenue.
The same is reflected in Denmark where casinos must pay tax on their gross revenue. This is a huge chunk of their gross revenue that is 45% to 75% for both land-based and online casinos. Local players, however, aren’t required to pay any taxes on their winnings. In Sweden, the rules are different. There are those winnings that are taxed and those that aren’t. Do thorough research to differentiate between the two.
Gambling Winnings in Sweden
It’s best to understand all gambling rules and regulations in a country before you start playing at a casino. Sweden has its own set despite being part of the larger European Union. All gambling activities including licensing and supervision are handled by the Swedish Gambling Authority (SGA).
The country recently changed its laws when it comes to gambling activities in the country. This change affects both land-based and online casinos operating within its borders. The new Swedish Gambling Act took effect on 1st January 2019 and largely affected anything to do with gambling money. The overall tax for all companies involved in the gambling industry was set at 18% of all their gross revenue.
Sweden rules that apply to gambling winnings within Sweden differ in certain aspects. You are required to pay some taxes on some winning and nothing at all on others. Gambling winnings obtained from casinos that are licensed by the SGA to operate within Sweden are tax-free. The same applies when you play real money games within the country and win.
Pay taxes when the winnings are derived from all unlicensed casinos operating illegally as per the law. If you play any online games that are not authorized within the EU, your winnings will be taxed. The same applies to real money games outside of the EU. In case you take part in a pyramid scheme, the winnings are taxable as well.
Gambling Winnings in the UK
The UK is considered gambling heaven by many players. This is due to its favorable environment that is fair and safe for anyone taking part. When you win big in any form of gambling, the first thought is taxes after celebrating the win. Do you have to declare the winnings in your tax return?
The fact is the UK is tax-free for all gambling-related winnings. Good news to all! There is nothing in the laws of this country requires you to pay a dime in taxes once you win. Even if you win the largest amount ever in the history of gambling, it’s all yours to keep. The UK Gambling Commission won’t be knocking at your door any time soon.
In case you gamble outside of the UK and are a citizen of this country, the same applies. Many countries, especially within the EU, have agreements with the UK. You won’t be required to pay any taxes on winnings in these countries as well. These are recent rules as gambling winnings were taxed before the laws changed.
The hustle of claiming back losses when it comes to tax returns was too much. This inevitably led to the laws changing. The tax-man saw it best to leave winnings alone making it easier for all involved. It’s easier for them to go after the gambling operators who are required to pay taxes on their gross revenue.
The fact that winnings aren’t taxable has made many professional gamblers quite happy. These are people who earn their living from gambling only. The joy they must feel by never paying any taxes on their income leaves many green with envy!
Gambling Winnings in Denmark
Within Denmark, all gambling activities are under the Danish Gambling Authority (DGA). All operators operating within this country must obtain a valid license from this authority. Some winnings are taxed in Denmark and some are not. It all depends on where you gambled. In case winnings are derived from an operator licensed by the DGA then they remain tax-free. The winnings that are taxed are those from unlicensed operators.
Such winnings are highly taxed to try and dissuade Danish citizens from gambling with unlicensed casinos without Rofus protection. Still, ‘spil uden Rofus’ is a very popular keyword to find such unlicensed casinos by the Danes, especially, with Malta Gaming Authority (MGA) license: these EU-based casinos offer tax-free winnings to players from Denmark.
- Do I have to declare gambling winnings in the UK?
No. This is simply because gambling winnings are not taxed in the UK. The tax applies to gambling operators only. All winnings are yours to keep.
- Are professional gamblers taxed in the UK?
There is no tax levied to professional gamblers. Any income they derive from all forms of gambling is tax-free.
- Can I deduct my gambling losses when filing taxes?
Yes. Gambling losses are tax-deductible but only to the extent of your winnings. This means you must fully disclose your winnings to the tax-man.
- Must I declare gambling winnings in Denmark?
Gambling winnings are not listed as taxable income in Denmark. It’s not a must you declare anything while filing your taxes. This is according to the HMRC guidelines of this country in regard to taxable income.
- Do my gambling winnings get taxed in Sweden?
It all depends on how you obtained them. If the operator is licensed to operate in the country, your winnings are tax-free. If not then you must pay taxes on your winnings.