In Spain, the current legislation on taxation and taxation of the profits obtained from poker and other recreational activities related to games of skill and chance has undergone several modifications in order to apply, in a fairer way, the regulations year after year in the annual declaration.
For example, one of the measures that during the last decade has allowed a more equitable use of the laws is the application of the tax laws of the player and not of the platform, avoiding that the tax domiciliation of the poker rooms in tax havens and areas with lax economic laws had any implication in the income of the users.
Taxation and poker: everything you need to know
The Tax Agency, with a view to the 2023 income tax campaign, published a note in which it equated, for tax purposes, poker players with professional athletes. A change of policy that meant a 180º turn as far as gambling ordinances are concerned, and that has allowed unifying criteria when applying tax payment calculations and other fiscal obligations.
In Spain, these regulations are governed by the General Directorate for the Regulation of Gaming, which establishes, in agreement with the tax authorities, the tax obligations to be met by players who, during the last fiscal year, have received sufficient net profits to be obliged to declare them to the tax authorities.
According to the latest data, the Spanish AEAT establishes that winnings of 1,000 euros or more must be declared without exception. But be careful: this calculation is equivalent to the total computation of gains and losses and, therefore, we are talking about net profits.
Assumption A:
- Player wins 3,600 euros playing poker in a year.
- During the same year, he loses 2,900 in poker games.
- The total computation of annual profits is 700 euros.
- Result: He is NOT obliged to file a tax return.
Assumption B:
- Player wins 1,300 euros playing poker in a year.
- During the same year, he loses 200 euros.
- The total computation of annual profits is 1.100 euros.
- Result: YES, he is obliged to declare to the Treasury.
If I win money in the casino, do I pay taxes?
Yes, as long as you exceed the minimum of 1.000 euros net established by the Tax Agency. In essence, this is how winnings from online gambling, where poker has a great predominance, are taxed.
However, on more than one occasion we come across players who combine both winnings and losses not only in poker, but in other casino games, as well as in sports betting. It must be taken into account that all these activities are incorporated as standard in almost all rooms and bookies and, therefore, making the leap from one to another is the most common thing to do.
What happens then with the gambling tax? Let’s take a look at it:
Assumption C:
- Player wins 1,900 euros playing poker in a year.
- During the same year, he loses 1,000 euros playing poker.
- Result of net profits obtained in poker: 900 euros.
- Preliminary conclusion: he is NOT obliged to declare to the tax authorities.
- But the same player has participated in sports betting.
- In sports betting, he won 300 euros, but lost 200 euros.
- In sports betting alone, he has obtained a net profit of 100 euros.
- The total result of the poker and betting winnings amounts to 1,000 euros.
- Result: YES, you are obliged to declare.
This is one of the worst cases, since the calculations leave no room for doubt: if he had only played poker, the net profit is greater than that obtained playing poker and sports betting, going from 900 euros to 1.000 euros, minus the percentage to be paid to the Treasury.
Therefore: from how much money do you have to declare to the Treasury? 1.000 euros is still the benchmark for establishing the obligation to inform the tax authorities of this income. And the same with sports bets: the Treasury does not discriminate whether they have been played alone or combined with poker or casino games. If the winnings reach 1,000 euros net, they must be included in the tax return.
It is important to remember that failure to comply with your tax obligations may result in a fine for not declaring bets. The same applies to poker and gambling activities that can be carried out in poker, casino and betting rooms.
To have a better control over your winrate and accumulated winnings, it does not hurt to keep up to date by taking a look at your annual poker statistics, where you can find a record with the balance of your results for the year and check if for the next fiscal year, you will be obliged to include the money received in the income tax return.
Is legal advice necessary to declare poker winnings?
Although it is not essential, it is highly advisable to have the services of a tax advisor. In sports betting, poker and other games of chance, having someone by your side who keeps abreast of the latest tax regulations to avoid problems in your tax return is essential.
Knowing how online gambling winnings are taxed is essential for your tax return to be filed without errors, so if you can afford it, it may be a good idea to have that extra help.
