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Old 03-16-2010, 01:24 AM   #1
wiseguy2009
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Taxation On Australian Poker Winnings

I'd Like Some Insights Into This Topic, Regarding Manily In Regards To Australian Poker Players, Australian Taxation Law, I Myself, Is Have Studied Australian Taxation On This Topic, But Not A Expert In The Field, Like Some "Constructive" Responses.

I Am Aware Of The Hachem Case, That Because He Stated It Was Just A Hobby He Just Had To Pay Capital Gains Tax, Not Income Tax

Is The "Hachem Hobby Defence" Only To Be Used Once, Then The Next You Will Be Regarded As A Professional And Have To Pay Income Tax On Your Winnings

Obviously Most Readers Do Not Have Education On This Matter... So Please Dont Post Here...
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Old 03-16-2010, 01:28 AM   #2
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Re: Taxation On Poker Winnings

Also I Forgot To Add, What Places... Obviously Monaco Where Taxation Is 0% But You have To Be Celebrity Status To Live There... What Other Places Would Be Good For A Professional Poker Player To Live Regarding The Taxation "Benefits" My Taxation Professor Said That If You Lived In Hong Kong Tax Would be 16% So Thats Good.. That Was The Only "Developed" Placed That Was Mentioned That Had A Good Tax Benefit of Staying In That Country
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Old 03-16-2010, 02:37 AM   #3
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Re: Taxation On Poker Winnings

Its tax free in the UK
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Old 03-16-2010, 02:53 AM   #4
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Re: Taxation On Poker Winnings

Hey OP i have looked this up as well, if you are a student or have a job and don't make a huge amount of money (to be called capital gains) it is considered in the same respect as pokies winnings or casino games winnings. Thankfully the AUS has decided, for policy reasons not to accept poker as a skill game, the money they would make from it is negligible to the support they would lose from other industries. That said it is illegal for any company to charge a 'rake' on any game outside of licensed casinos, so playing poker online is not illegal but no company can run out of Australia.

Basically if you win a few k now and then then they can't touch it, as long as it isn't all your doing. If you are unemployed and making a decent amount but not enough to justify living on i suggest jumping into a tafe course, some are cheap and super easy and that way you can grow and become a good player before you are officially a poker player.

If you are already a poker player it is considered a income, id get in touch with an accountant because almost anything is tax deductible because you are working from home.

Hope this helps, also you can call the tax office anytime and they will answer any questions, this is all anonymous.
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Old 03-16-2010, 07:02 AM   #5
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Re: Taxation On Poker Winnings

I have been searching the internet to find Hachem Case Vs The ATO (Australian Tax Office) but cant find it...

My Taxation Law Professor Told Me That...

Poker winnings will be taxed if it the ATO can prove it wasnt just a hobby... that it was a business of some sort, like keeping records, number of times you went, and like what Quad said looking if thats all you did... so that guy posted something usefull... (suprise to me on a 2 plus 2 forum)

I also... while researching... came across another case about Tony Hachem... they sent some Tax Men and Armed Officers to break into his home to find evidence of "Professional" status while gambling... which is a suprise to me... so like if you win like $1,000,000 you better delete all your "data" or they might connect it as not just being a hobby
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Old 03-16-2010, 07:18 AM   #6
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Re: Taxation On Poker Winnings

Come to NZ
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Old 03-16-2010, 07:19 AM   #7
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Re: Taxation On Poker Winnings

Quote:
Originally Posted by Invertible View Post
Its tax free in the UK
Yeah they don't tax us cause we are all sh*te and never win tbh
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Old 03-16-2010, 07:35 AM   #8
wiseguy2009
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Re: Taxation On Poker Winnings

I read somewhere that somebody posted about the Hachem Case... they said that 3 million was paid to the US tax office... WHAT?!? Hachem has an Australian Residency and only has to pay Capital Gains Tax on (since he won 10mill, 5mill is taxed) so whatever the amound 3mill whatever to the Australian govenment... whoever wrote that comment that he had to pay to the US was completely wrong, Hachem doesnt need to pay a cent to the US Government because he is not a resident there
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Old 03-16-2010, 07:37 AM   #9
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Re: Taxation On Poker Winnings

Quote:
Originally Posted by Invertible View Post
Its tax free in the UK
Really how do you know that? In Uk they dont even have a Capital Gains Tax? if your a professional you can just keep it...

btw do you know what your talking about? or u another college drop out???
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Old 03-16-2010, 07:39 AM   #10
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Re: Taxation On Poker Winnings

Quote:
Originally Posted by wiseguy2009 View Post
Really how do you know that? In Uk they dont even have a Capital Gains Tax? if your a professional you can just keep it...

btw do you know what your talking about? or u another college drop out???

EVERYTHINGS FREE IN UK,WE ARE THE SUPERIOR NATION WITH LOADS OF MONEYZ
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Old 03-16-2010, 07:48 AM   #11
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Re: Taxation On Poker Winnings

Quote:
Originally Posted by wiseguy2009 View Post
I read somewhere that somebody posted about the Hachem Case... they said that 3 million was paid to the US tax office... WHAT?!? Hachem has an Australian Residency and only has to pay Capital Gains Tax on (since he won 10mill, 5mill is taxed) so whatever the amound 3mill whatever to the Australian govenment... whoever wrote that comment that he had to pay to the US was completely wrong, Hachem doesnt need to pay a cent to the US Government because he is not a resident there
Not true. Unless there is a Tax Treaty between the USA and Australia that exempts "gambling" income from taxation, the Casino will withhold 30% of the winnings from any tournament held in the USA (over $5000).
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Old 03-16-2010, 07:53 AM   #12
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Re: Taxation On Poker Winnings

true, lucky for UK we have a treaty with the US . No tax on poker ever. Shame about the weather thou -.-
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Old 03-16-2010, 08:40 AM   #13
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Re: Taxation On Poker Winnings

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Originally Posted by JSBAHIA View Post
true, lucky for UK we have a treaty with the US . No tax on poker ever. Shame about the weather thou -.-
Yep, I would move to UK instantly if it wasn't for the weather and food.

What other countries are there that doesn't tax poker winnings?
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Old 03-16-2010, 09:07 AM   #14
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Re: Taxation On Poker Winnings

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Come to NZ
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Old 03-16-2010, 09:25 AM   #15
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Re: Taxation On Poker Winnings

At deucescracked, listen to podcast 56 with poker accountant Russ Fox, he talks a little bit about the Australia situation, but a ton about American tax law and its relation to poker.
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Old 03-16-2010, 01:36 PM   #16
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Re: Taxation On Poker Winnings

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Originally Posted by AgentCooper View Post
Yep, I would move to UK instantly if it wasn't for the weather and food.

What other countries are there that doesn't tax poker winnings?
Malta, Croatia, Thailand...

Look the threads where i posted on this forum...
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Old 03-16-2010, 03:09 PM   #17
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Re: Taxation On Poker Winnings

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Originally Posted by frenchpignouf View Post
Malta, Croatia, Thailand...

Look the threads where i posted on this forum...
Online poker is illegal in Thailand.
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Old 06-13-2010, 09:01 AM   #18
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Re: Taxation On Australian Poker Winnings

you have to pay taxes on winnings in malta. im livin there atm and will move away soon. thinkin bout oz or uk.. thats why i found this thread. if you know something intresting bout oz please post links!

Gibraltar is 100% tax free if you wanna know.
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Old 06-13-2010, 10:44 AM   #19
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Re: Taxation On Poker Winnings

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Yep, I would move to UK instantly if it wasn't for the weather and food.
wtf our food owns
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Old 06-14-2010, 01:45 AM   #20
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Re: Taxation On Poker Winnings

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wtf our food owns
LOL, England conquered the world and they didn't bother to bring back any good food.
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Old 06-14-2010, 06:23 PM   #21
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Re: Taxation On Australian Poker Winnings

rick stein has convinced me that good english cookery is delicious.
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Old 06-24-2010, 05:21 AM   #22
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Re: Taxation On Australian Poker Winnings

So for what its worth Australia doesnt tax windfall gains. including lottery wins and general gaming wins.

it does tax activities that are done in a business like manner with a view to making a profit. hobby activities are generally not taxed but a hobby would generally not be soemthing that supports your life style and the only source of income that you have. Hobbys also generally dont keep books of account or track winning and loosing sessions.

Ultimately the taxation position of a poker player is based on the facts and circumstances of that player in Australia. my recommendation is that each person get their own tax advice for their circumstances as the results will be different for each person to some extent.

As i noted in the Dueces Cracked forum after that podcast was released it was slightly wrong on Aus stuff. But anyway.

Anyway Hachem never went to court as i understand it, he settled out of court. in order to have a capital gain (CGT) you must dispose of something. so I would guess that Hachem would have been taxed based on the disposal of his rights he had over his image for some portion of his winnings. But I dont know him or the circumstances he had so can only guess.

I presume that the US would have taxed it on a withholding basis when he won as well. The Casinos in Vegas have details at the cashier about their tax law and our US/AUS Double Tax Agreement (DTA) does not remove the US's taxing right so we aussies pay tax on it in the US on a withholding basis over a certain level of prize paid.

similarly, the Aus goverment would look to tax some portion of the major tournament prizes when a professional player wins. Either as business earnings, or via the disposal of the rights to the players image or the provision of services as an an entertainer. Generally business income of a foreign person is not taxed unless they have a permanent establishment (PE) when they are from a DTA country. Services provided as an entertainer are different and slip through our DTAs generally. Payment for services is income generally in Aus and taxed if the services are done here regardless of the PE status. you are an entertainer when there is a TV show or an event. most major tournaments would be considered entertainment i would think.

in most cases where the person is only a part time player and is not a professional then i would think they could only tax some portion of the winnings under CGT for the disposal of the rights over their image to the casino i would think, although the entertainment services coudl be some portion as well. I dont know what advice Casinos have on it but they have internal tax people normally that would consider their withholding requirements.

As to countries that dont tax it. I am not sure. i only do Aussie tax.

for the record i have a masters degree in Aussie tax from the university of melbourne. I note however that none of the above should be relied upon. always get the advice of a tax professional for your circumstances as each persons position may be different.

cheers

Last edited by FSL009; 06-24-2010 at 05:33 AM.
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Old 06-24-2010, 09:31 PM   #23
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Re: Taxation On Australian Poker Winnings

Hi all, thought it was about time to make my 2 cent contribution.

Just to clarify a previous comment made about Joe Hachem. Joe is almost certainly the taxpayer referred to in PBR 58083, although for privacy reasons he is not identified. He would not have had to go to court or settled for this ruling to have been issued. This application would have been prepared by his accounting advisers.

The ATO ruled in favour of Joe. It is relevant however that under the double tax treaty with the US he was not able to get a refund of the 30% witholding tax he paid to the US govt.

Now I also want to make some general comments. Those who have seen my posts in other threads on the Australian Tax issue will know my opinion on the tax law in Australia and I can say that this hasn't changed.

There is no doubt that some elements of the ATO will see gambling income as being a potential source of revenue, and that all players with substantial earnings should seek advice from their professionals. My view is that this is largely a result of the generational change which occurs in organisations, where the reasons for previous ways of doing things are forgotton, and what were generally accepted ways of viewing situations changes.

But it is very necessary to make the point that an ATO opinion is just that, an opinion. It is not settled law. Whether someone is in the business of gambling will always be determined by a court. And there is no doubt that the common law on gambling very clearly shows that it will be extremely unlikely that a mere player or grinder will ever be in the business of gambling.

Now, for the ATO to determine a players winning to be taxable, it has to jump through a number of hoops to make their case, including public ruling interpretations, internal legal advices, private ruling appeals, (where requested by the taxpayer) , administrative appeals tribunals, federal court and in rare cases a full bench federal court. (Potentially high court too but I would see this as so unlikely as not to be relevant.) And all to make a unique case as to why the current gambling tax iprecedents shouldnt apply to poker.

Now, I have seen interpretations made, even by other accountants that if it represents your sole source of income you are very likely to be in business.

I can't emphasise enough that in my view this interpretation is erroneous. (from the common law not the ATO perspective.) The reason for that is that if one were to dig into the gambling case law it is very clear that gambling income is considered in the case law to be a very distinct and different beast from normal commercial activities. In other words, its the nature of the obtaining of the income not the quantum that is relevant.

Now, after all that said this doesnt mean that the ATO won't come knocking at your door looking to generate an argument for paying some tax. What I want to reassure the poker community in Australia with my comments is the assurance that the argument for the non taxable status of poker income is very soundly based, supported by the common law and it is a fight worth fighting for.

cheers all

Bruce
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Old 06-25-2010, 12:40 AM   #24
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Re: Taxation On Australian Poker Winnings

It is only illegal for them to advertise Real money poker to australians. They get around this by advertising the free play side of the site. But it is not illegal for aussies to play on there sites..
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Old 02-20-2013, 04:49 AM   #25
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Re: Taxation On Australian Poker Winnings

Hello,

I have done some research as i won the Sunday Million recently.

Any profits in Australia will not be taxed unless that is your only form of income. Gambling profits are also EXEMPT from Capital Gains Tax in Australia

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