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Taxes and gambling – taxation of gambling

Profit from gambling and taxes -Do I owe any taxes on gambling profits? What we will need to do if we have profit from gamblingPerhaps every fan of risk and gambling at a time of time has asked themselves: “If I win the jackpot today, do I have to pay income tax? “. We usually think about this matter  when we manage to make a more serious profit from gambling.  After that we think about the amount, we will get from it.

In this article, we want to pay attention to who bares the taxes in the gambling industry.

Prizes and winnings from participating in various games and gambling can be both monetary and/or an object. In determining the time of acquisition of the income, the general principle applies the general principle of IITA, as set out in Art. 11, para. 1 of the law. Where namely income shall be deemed to have been acquired on the date of:

  • payment – when paying in cash;
  • crediting the account of the recipient of the income or receiving the check – in case of unavailable payment;
  • receiving the consideration – for non-monetary income.

The acquisition of object rewards or profits is considered non-monetary income. When gambling income is non-monetary, it must be valued in BGN at the date of their acquisition using market price.

For example, for a gambling reward acquired by an individual – a car. The amount of income will be the determined market price of the car at the date of its acquisition.

Generally speaking, prize income as well as winnings from participating in games can be taxable or tax-free.

Tax-free income

Non-taxable income is cash and object profits derived from participation in games of chance within the meaning of the Gambling Act or derived from participation in games other than games of chance, in which the profit is determined at random (Art. 13, para 1, item 20 and item 21 IITA).

Gambling is considered to be random games where there is a mandatory bet, and a win or a bet may be lost. Any payment of money, directly or in any other form, is pledged to participate in a gambling game for the purpose of obtaining a profit. It is important to note that gambling on the territory of Bulgaria can be organized only with a license issued by the State Gambling Commission.

It is no surprise to anyone that different countries have different laws and rules. This, as you can see, also applies when it comes to taxation. Here is the time to note that Bulgaria also has its own legislation and clear regulations on whether gambling profits are subject to profit tax. To be even more precise, we will refer to a specific point in the law: Article 13(20), which states that no monetary or object prize in the country is taxed. It is important to note that this law applies not only to Bulgaria, but also to all other EU member states.

How do we know, however, which gambling profits are not taxed…

To do this, it is good to specify which games and entertainments, according to the law, are considered gambling?

According to the legal regulations, all games of chance in which there is a cash bet that can be lost are considered to be gambling. That is, these are all known today online casino entertainment such as:

  • Poker;
  • Roulette;
  • Bookmakers;
  • Bingo games;
  • Sports predictions, etc.

 Taxable income

  • Income from employment relationships
  • Income from other economic activities
  • Income from other sources
How much money can be earned from gambling without paying taxes?

Whatever the profit, once it is won by gambling, is not subject to taxation. Whether it’s hundreds or thousands, the player owes nothing to the state. Operators who have licenses to pursue such an activity are taxed annually, but on the basis of their profit from commercial activity from gambling.

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