As of: April 9, 2024, 7:00 a.m
By: David Holzner
Comments
Press
Split
Millions of Germans indulge in gambling. But are the profits from this taxable? Luck also plays a crucial role in this question.
No matter whether lottery, casino, sports betting or TV quiz shows. Where there is something to be won, people play. According to a report by the
Joint Gaming Authority of the States (GGL)
, 36.5 percent of Germans took part in at least one game of chance in 2023. Even though the chance of winning is often very small, many people dream of a big jackpot. Everyone has probably asked themselves the question of what they would do with a million-dollar win. A villa on the beach? An expensive sports car? But does anyone think about paying taxes on the money? And do you even have to?
Sixes in the lottery: Do you have to tax winnings from gambling?
Winnings from gambling are generally tax-free. But there are exceptions. © Michael Bihlmayer/Bihlmayerfotografie/IMAGO
The chances of winning six in the lottery are extremely bad at 1:140 million. But in the lottery, winnings are paid out with fewer correct numbers. There is more good news for the lucky winners. Lottery winnings are generally tax-free. The reason for this: Lotto is a matter of luck and therefore does not fall under one of the types of income regulated by the Income Tax Act. But be careful: As the
United Wage Tax Aid eV
. explained, interest on lottery winnings is taxable. If you invest the profit and earn interest with it, it counts as capital gains. Then taxes are due.
Casinos and Co: Are betting winnings tax-free?
No matter whether in bars, pubs or casinos. Many people in Germany try their luck on slot machines like the one-armed bandit. There are no taxes on the winnings paid out. The chances of winning are a matter of luck and in most cases it is not a commercial activity. But what about betting on sporting events? The principle also applies here: If the income came about purely through luck, the winnings do not have to be taxed as income.
But the treasury doesn't go completely empty-handed. As
Computerbild.de
explains, online sports betting providers have had to pay 5 percent tax on all sales in Germany since 2012. How these ultimately affect the betting customer can vary. In many cases, this tax is due when placing the bet. For other providers, the betting odds are corrected downwards accordingly.
Would you like valuable money-saving tips?
Merkur.de's “Clever Save” newsletter always has the best money-saving tips for you every Thursday.
My news
Tax return 2023: From this amount onwards, pensioners have to pay taxes
Waiver of inheritance: This is how you can regulate the distribution of the inheritance during your lifetime without a will
Flat rate for business expenses 2024: This is how high the flat rate is for the tax year 2023 read
Additional earnings limit: Pensioners have to pay attention to this since the beginning of 2024
Exchange 2 euros for 28,000: Read which coins are traded online for huge sums
Extraordinary expenses: You can deduct these expenses from your taxes
Taxes on poker winnings: luck or skill?
Things are a little different with online casinos and especially with poker. Because it is generally considered gambling, winnings from poker are actually tax-free. However, a distinction is made as to whether these are casual players or professional players. The
Federal Finance Court (BFH)
decided this
in a ruling from February 2023.
It says: “For players, as well as for athletes, the necessary distinction from private activities depends on whether the taxpayer's activity satisfies private gaming needs in the same way as a leisure or hobby player or whether, in the overall view, structural-commercial aspects play a decisive role “In poker, analytical thinking and strategic play have a high impact on the chances of winning. For professional players, gambling becomes a game of skill and is therefore taxable.
Winning money on TV quiz shows: “Who wants to be a millionaire?”
One form of gambling that tax theorists disagree on is winning money from TV shows. The show “Who Wants to Be a Millionaire?” in particular repeatedly poses difficult questions for tax experts. As the magazine
SteuerberaterScout
explains, profits from “Who Wants to Be a Millionaire?” are usually classified as tax-free in practice. The argument is that answering the questions correctly requires not only knowledge, but also luck.
The candidates could therefore only prepare to a limited extent and could not influence which questions they would be asked. At the same time, however,
SteuerberaterScout
recommends
listing income from TV shows in your tax return to be on the safe side in case the tax authorities still claim part of the profits.