When do I have to pay gambling tax?

Amounts won are subject to gambling tax in the Netherlands. Amounts above 454 will be subject to this levy. Poker is also seen as a game of chance. A game of chance is a game based on luck. Someone who buys one Staatslot has just as much chance of winning the prize as any other participant who also has one Staatslot. As soon as other factors come into play, such as certain skills, it can be excluded from this taxation. The consequence in that case may be that it will be subject to income tax. In terms of the levy percentage, levying gambling tax is more favorable, namely 29 percent. Income tax increases as income increases, but amounts to a minimum of 33.50 percent. An insurance policy in which the payment is made dependent on whether or not the insured person is alive is also a chance agreement. However, these are excluded from the levy of gambling tax.

What amount is taxed?

The amount won from 454 onwards is subject to 29 percent gambling tax. Amounts up to 454 are tax-free. If the prize money is higher, you also have to pay tax on the first 454. The Staatsloterij pays out the gross prize money net. Normally the net payment to a prize winner is the amount won minus 29 percent. The Staatsloterij simply pays out the gross amount net. They therefore take care of the taxation, as it were. The other lotteries will first reduce winning amounts by the 29 percent tax. So from a 1 million win, what remains is: 1 million – x 29 percent = 290,000 in tax. The payment is therefore: 1 million – 290,000 = 710,000. After settlement, the Tax Authorities also levy annual tax on the assets in Box III.

Who must pay the gambling tax, the recipient or the provider?

The tax must be paid by the recipient, but the provider of the prize withholds the tax.

Do I have to pay taxes on prizes from foreign lotteries?

Yes, you also have to pay gambling tax on the amount won. Unlike Dutch lotteries, foreign lotteries do not withhold tax. As a taxpayer you are obliged to report this to the tax authorities.

When is a game considered a game of chance?

A game where a participant can win a prize does not always fall under the name of a game of chance. The law states that the determining factor is the extent to which the participants can influence the game. Solving puzzles is seen as a game of chance, because most participants can find the solutions and a winner will be drawn from the entries. The influence of the participant is not decisive here, but luck. Completing a slogan or tagline in which the best submitter wins a prize is not a game of chance, but a juried achievement.

Isn’t poker a game of chance?

According to experts, poker is not a game of chance, but a game of skill. However, the proceeds from poker are subject to gambling tax. The poker player must report winnings to the tax authorities themselves. The amounts wagered may be deducted from the winnings. They cannot collect the tax from the provider of the money because that is a very difficult issue. The loser is usually the provider of the money. In the Netherlands, a lot of poker is played via the internet. Legally speaking, this is not even allowed. Only Holland Casino is allowed to organize poker tournaments. The government is now making plans to expand the game’s providers.