Tax returns as an Irish poker player

[PokerTaxaments]

I play a big volume of online mtt poker, maybe 40+ hours a week. I recently received a form asking me to do a tax return. What do I do with this form?

Thanks in advance for all information.

[Caf]

I'm guessing you fill it out.

[NewApproach]

What form is it?

[TheDrunkenOne]

Are you on the dole?

[PokerTaxaments]

It's a green form called Form12 requesting returns on income/capital gains for year 2011. No I do not receive welfare of any sort .

[NewApproach]

It's a green form called Form12 requesting returns on income/capital gains for year 2011. No I do not receive welfare of any sort .

It's probably going to be nil so assuming you are in receipt of no social welfare/PAYE income/dividend income etc.

It brings up a topic I have wondered about for some time, for folks who earn lots of money from poker and cannot claim social welfare (i.e. Doke), how do they exist to the Revenue / DSP? While they are doing nothing wrong by not claiming dole or paying income tax, the government agencies might get a surprise when this person who didn't appear on any systems for years all of a sudden tries to claim a pension for example.

[shrapnel]

everybody gets it. not every year, but they just want to see if your tax credits, paye, etc are in line. just got mine today also. last time i got one was 3 years ago.

fill it in.

[PokerTaxaments]

So just fill in 0 everywhere right?

[markc]

So just fill in 0 everywhere right?

request form 11. form 12 is for employees and company directors. Assuming your only income is from online or live poker winnings you are self employed but currently the income and expenses from your trade are tax exempt. Nil everywhere should do it but be careful to read all sections just in case you have rental income or some such. If U were a full time pro U would need to be careful. I am not sure sponsorship income would be exempt unless it is 100% tourney fees. Bit of a grey area I think.

[LuckyLloyd]

Gambling and lottery earnings are outside the scope of Income Tax. All such income is non taxable. Be very thorough about including any other income streams though. But yeah, if you have no taxable income, then just fill out the form accordingly. Personally, I'd fill out that form and return it. If it isn't correct they'll send another one out to you.

They may follow up with you, but if they do just tell the truth - your correspondence with poker sites in terms of deposits / withdrawals is all you'd need really and they'll send you a full record of same for any period you like upon request.

[LuckyLloyd]

It brings up a topic I have wondered about for some time, for folks who earn lots of money from poker and cannot claim social welfare (i.e. Doke), how do they exist to the Revenue / DSP? While they are doing nothing wrong by not claiming dole or paying income tax, the government agencies might get a surprise when this person who didn't appear on any systems for years all of a sudden tries to claim a pension for example.

Well, the DSP would ask a lot of questions if you turned up tomorrow and tried to claim Jobseeker's Allowance. But, like any 'unusual' situation, the truth should set you free assuming you garnered the right information from the poker sites you played on and could reasonably show that this was your primary / only form of income during the period you were off the PAYE grid (and that such an amount of income could reasonably sustain your existence).

The Revenue send out things like this to people who have no taxable declarations for an extended period or who have had many jobs within the PAYE net. A friend of mine was requested to complete his own statement of taxes for a couple of years in succession after holding a variety of odd jobs.

It's never anything to worry about, the truth is on your side in this case. You're not breaking the law or withholding anything from any state agency. It might mean that your waiting period for social assistance / pension is longer and you are given more hoops to jump through when / if the time comes - but you remain entitled to whatever you are entitled to.

[NewApproach]

Gambling and lottery earnings are outside the scope of Income Tax. All such income is non taxable. Be very thorough about including any other income streams though. But yeah, if you have no taxable income, then just fill out the form accordingly. Personally, I'd fill out that form and return it. If it isn't correct they'll send another one out to you.

They may follow up with you, but if they do just tell the truth - your correspondence with poker sites in terms of deposits / withdrawals is all you'd need really and they'll send you a full record of same for any period you like upon request.

Gambling/lottery winnings are dealt with under the CGT legislation, but are specifically exempted.

So yeah, if they decide to start taxing it it would be subject to CGT rather than IT.

[blaaaaaaah]

This is quiet interesting thread. On a another note which relates to all this, I had interesting conversation with my solicitor about tax and paying tax in our profession (poker). He stated to me while right now obviously you have nothing to worry about on income from poker, it will come someday soon that not just only will tax be introduced to poker etc but also a back date tax on all previous winnings. Now I'm obviously not sure how true this statement is but he seemed pretty adament about it and also went on to suggest if from now on you go to an accountant and allow him/her to do your records (obv no more than what you have to say if you get me) and to a small extent as in you pay minimal amount of tax to basically keep the tax man away from past previous and future earnings. Obviously if they really want to they could go through your past winnings (if it's possible) and make you a pay a chunk back in tax but again he was adament that most of the time if they see your paying tax they will carry on onto the next person.

Anyone who can shed some more light on this feel free, I'm just putting out there what was said to me.

[V for Vendetta]

Lol. I'd love to see how your advisor friend thinks this would stick.

This is quiet interesting thread. On a another note which relates to all this, I had interesting conversation with my solicitor about tax and paying tax in our profession (poker). He stated to me while right now obviously you have nothing to worry about on income from poker, it will come someday soon that not just only will tax be introduced to poker etc but also a back date tax on all previous winnings. Now I'm obviously not sure how true this statement is but he seemed pretty adament about it and also went on to suggest if from now on you go to an accountant and allow him/her to do your records (obv no more than what you have to say if you get me) and to a small extent as in you pay minimal amount of tax to basically keep the tax man away from past previous and future earnings. Obviously if they really want to they could go through your past winnings (if it's possible) and make you a pay a chunk back in tax but again he was adament that most of the time if they see your paying tax they will carry on onto the next person.

Anyone who can shed some more light on this feel free, I'm just putting out there what was said to me.

[welk_in]

Sorry but a back tax on poker winnings is probably the most unenforceable and stupid thing I ever heard.

Say someone luckboxed a donkament for 100K, then lost it all playing cash.

Are you saying that he's gonna be liable for 20K tax (if the rate was 20%)

Sounds fucking ridic and I think your solicitor, like most solicitors, is trying to con you out of money.

Something tells me you're levelling anyway.

[NewApproach]

There is a less than 1% 0% chance that should they introduce some form of tax on poker winnings that it will be backdated.

[shrapnel]

Sorry but a back tax on poker winnings is probably the most unenforceable and stupid thing I ever heard.

Say someone luckboxed a donkament for 100K, then lost it all playing cash.

Are you saying that he's gonna be liable for 20K tax (if the rate was 20%)

Sounds fucking ridic and I think your solicitor, like most solicitors, is trying to con you out of money.

Something tells me you're levelling anyway.

i agree the back tax issue is beyond ridiculous, but for the example above, no it wouldn't work that way. you'd be taxed on your yearly gain/loss, so in your case 0.

thinking about it though, the only way and the only people they can back tax it to, are the few people who have declared themselves as pro poker players and who have filed returns. anything else is completely unenforceable.

[bustamoves]

seems a silly thing for a solicitor to say given that poker is considered gambling and gambling winnings are currently non taxable. sack him before he fucks other things up for you.

[TheDrunkenOne]

surely interest on investing poker winnings is income and therefore taxable but likely for most fall below allowance threshold

[kincsem]

Read the form carefully. There is a difference between no income, and income that in not taxable.
And afaik you can go to the tax office with your figures and get them to help you fill out the form. That way you do not fill out the form incorrectly.

[shrapnel]

surely interest on investing poker winnings is income and therefore taxable but likely for most fall below allowance threshold

we're talking about poker winnings here, not assets you got with those poker winnings which will be subject to CGT.

[NewApproach]

Poker/lottery/gambling winnings are treated as capital in nature and are specifically exempted

Should it be deemed that these were as part of a trade (i.e. a professional poker player) it could be subject to Income Tax which is a higher rate.

But that will only become relevant if they change the relevant legislation and I'd be very surprised if that happens any time soon.

[NewApproach]

we're talking about poker winnings here, not assets you got with those poker winnings which will be subject to CGT.

Currently dealt with under CGT legislation, and deemed capital in nature but not chargeable.

[Dice75]

I'd rat ye all out for immunity on my meagre winnings if any Revenue people are reading......

[NewApproach]

I'd rat ye all out for immunity on my meagre winnings if any Revenue people are reading......

Don't worry there's a €1,270 annual exemption

[shrapnel]

Currently dealt with under CGT legislation, and deemed capital in nature but not chargeable.

??? i think we're getting our wires crossed. if you win the lottery/wsop, those winnings are not taxed. put that money to work in a savings account, and those gains will be taxed.

[NewApproach]

??? i think we're getting our wires crossed. if you win the lottery/wsop, those winnings are not taxed. put that money to work in a savings account, and those gains will be taxed.

Ha yeah I think we might be! You scoop a million from a poker win. You leave it under your mattress - you pay no tax. You put it into the stock market - you pay CGT / Stamp Duty etc. on the shares but the source of the money is irrelevant from a tax perspective.

[nicnicnic]

This is quiet interesting thread. On a another note which relates to all this, I had interesting conversation with my solicitor about tax and paying tax in our profession (poker). He stated to me while right now obviously you have nothing to worry about on income from poker, it will come someday soon that not just only will tax be introduced to poker etc but also a back date tax on all previous winnings. Now I'm obviously not sure how true this statement is but he seemed pretty adament about it and also went on to suggest if from now on you go to an accountant and allow him/her to do your records (obv no more than what you have to say if you get me) and to a small extent as in you pay minimal amount of tax to basically keep the tax man away from past previous and future earnings. Obviously if they really want to they could go through your past winnings (if it's possible) and make you a pay a chunk back in tax but again he was adament that most of the time if they see your paying tax they will carry on onto the next person.

Anyone who can shed some more light on this feel free, I'm just putting out there what was said to me.

Not being trying to be smart here, I'd change solicitor. I wouldn't want someone who can be adamant about something they obviously know nothing about representing me for anything important.

[blaaaaaaah]

Lol. I'd love to see how your advisor friend thinks this would stick.

Advisor?

[blaaaaaaah]

Sorry but a back tax on poker winnings is probably the most unenforceable and stupid thing I ever heard.

Say someone luckboxed a donkament for 100K, then lost it all playing cash.

Are you saying that he's gonna be liable for 20K tax (if the rate was 20%)

Sounds fucking ridic and I think your solicitor, like most solicitors, is trying to con you out of money.

Something tells me you're levelling anyway.

Chill man, like I said just passing on the info!

[blaaaaaaah]

Yeah, I was a little taken back by it all tbh. I knew he obv doesn't know poker industry but maybe knew more about gambling and taxes. Cheers for the enlightenment guys.

[kincsem]

Just another thought.
I filled out loads of tax returns when I was about 20 years old. I was doing 5 year Chartered Accountancy articles (training contract with a firm.) and as the lowest of the low got the sh1t jobs.
If you do not fill out the form you will more than likely get an estimated tax assessment (a tax bill.) It could be for anything: €1000, €10000, €60000. If you do not appeal the assessment - send a letter to the tax inspector saying the assessment is estimated and excessive and you will send in your accounts / tax return to support your appeal within a specified time e.g. four weeks, then the assessment sticks and you must pay it by the date on the assessment. If you don't pay it then interest at a high monthly rate plus penalties are added.

So do not throw it in the bin. Get in touch with the tax people, and keep records of your / their correspondence.
hth

[Donkathon]

Say someone luckboxed a donkament for 100K, then lost it all playing cash.

Are you saying that he's gonna be liable for 20K tax (if the rate was 20%)

Sure was there not something stupid like this about victor boom or so some high end pro that where he lived you couldn't off set your losses againt your winnings for tax so he was liable for the tax on everything he won and got no credit for losses?

[bohsman]

Sure was there not something stupid like this about victor boom or so some high end pro that where he lived you couldn't off set your losses againt your winnings for tax so he was liable for the tax on everything he won and got no credit for losses?

Yea, right down to every pot won in a cash game. Relates to Sweden, this is why Stars recently got Stars.eu registered in Malta for Scandi players as different rules apply once site is based in EU.

[Lplated]

Yeah, I was a little taken back by it all tbh. I knew he obv doesn't know poker industry but maybe knew more about gambling and taxes. Cheers for the enlightenment guys.

With respect, not only does he not know much about poker, he would seem a bit deficient in his law knowledge also - retrospective taxation would be unconstitutional.

[welk_in]

With respect, not only does he not know much about poker, he would seem a bit deficient in his law knowledge also - retrospective taxation would be unconstitutional.

Agreed, if you're not levelling you should dump this turd lawyer of yours.

[markc]

With respect, not only does he not know much about poker, he would seem a bit deficient in his law knowledge also - retrospective taxation would be unconstitutional.

hmmm not sure about unconstitutional but it would violate every principle of taxation for sure. Will never happen.

@ blaaaaaaah. It might cost you a small few bob but u should ask him to formally advise you in writing as to the possible legal and taxation consequences of being a pro poker player, specificially the need for you to keep records of profits and losses in the event that retrospective taxation gets introduced. Publish the letter here and we can all have a bit of a laugh. I agree with nicnic, I would not let this guy near my legal affairs...

[Lplated]

hmmm not sure about unconstitutional but it would violate every principle of taxation for sure. Will never happen.

I'm pretty sure. Basic principle of criminal law that you can't retrospectively make something a crime - reasoning that citizens must be able to order their behaviour in order to stay within the law, it follows that behavior that was lawful at a given moment could not later be declared unlawful. Basis I think is the natural justice provisions of the constitution. Similar reasoning was applied in tax cases, provisions relating thereto have always be strictly and restrictively construed by the Courts.

[Mellor]

hmmm not sure about unconstitutional but it would violate every principle of taxation for sure. Will never happen.

If they tried impose a retrospective tax, non-payment of that tax for the backdated period would be a retrospective criminal offence, aka an ex post facto law. Which is specifically forbidden under article 15.5.1 of the constitution. Plus there's the whole area of property rights on top.

A supreme court judge said in 1985 regarding an attempted retrospective levy. (although the statement was ordered not to set a binding precedent)

“If it were held to operate retrospectively, [section 79] would have the effect of
making, ex post facto, non‐payment of the levy in 1979 an infringement of the law.
Such a result would make s.79 invalid having regard to Article 15.5 of the
Constitution.”

As mentioned above, I'd reconsider that solicitor.

[PokerPiper]

Anyone who can shed some more light on this feel free, I'm just putting out there what was said to me.

This is really a financial matter Jason. I wouldn't seek financial advice from a solicitor and there are very few accountants who would speculate on the subject. If they tax poker they will also need to tax punting in general. I can't see how they can enforce it. If the government want to generate revenue from poker/gambling I think the only way they can do it will be to charge a levy on transactions. It will be very interesting to see how it all unfolds over time.

I would urge caution around the area of staking. Income from staking others could be liable for income tax. I would get some advice on this.

[mugsy]

I would urge caution around the area of staking. Income from staking others could be liable for income tax. I would get some advice on this.

If they cannot put a system in place to tax individuals poker earnings how are they going to tax staking of players, surely this would even be more complicated. Them jokers in the revenue can barely sort out a basic tax return as it is.

[markc]

If they cannot put a system in place to tax individuals poker earnings how are they going to tax staking of players, surely this would even be more complicated. Them jokers in the revenue can barely sort out a basic tax return as it is.

Yeah, it would be just as tough as taxing winnings. There is a technical point that a stake to another player is essentially a gift and could in theory be taxable under CAT (or gift tax) which is 30% over the exemption limits which are approx 16k between unrelated parties. Unlikely there is much action going on beyond those limits (except maybe within a small pool of pros).

[Strewelpeter]

I would urge caution around the area of staking. Income from staking others could be liable for income tax. I would get some advice on this.

That's an interesting point to me it seems obvious and uncontestable that such earnings are taxable income.
I'm fairly sure that all these things are being looked at by the Revenue, not just Poker but sports betting and other forms of trading through what are ostensibly gambling accounts. Its impossible that they are not aware of the amount of money that has shifted from traditional investments to these markets in recent years.
I expect that a regime along the lines of Sweden or the US will be brought in in the next few years. Essentially income tax rates will be charged on profits above a certain level without any scope for deducting losses or allowances for expenses.

[Strewelpeter]

Yeah, it would be just as tough as taxing winnings. There is a technical point that a stake to another player is essentially a gift and could in theory be taxable under CAT (or gift tax) which is 30% over the exemption limits which are approx 16k between unrelated parties. Unlikely there is much action going on beyond those limits (except maybe within a small pool of pros).

All they need to do is require you to keep accounts.

[markc]

That's an interesting point to me it seems obvious and uncontestable that such earnings are taxable income.
I'm fairly sure that all these things are being looked at by the Revenue, not just Poker but sports betting and other forms of trading through what are ostensibly gambling accounts. Its impossible that they are not aware of the amount of money that has shifted from traditional investments to these markets in recent years.
I expect that a regime along the lines of Sweden or the US will be brought in in the next few years. Essentially income tax rates will be charged on profits above a certain level without any scope for deducting losses or allowances for expenses.

All they need to do is require you to keep accounts.

Under the current tax code income from staking others and taking a cut of profits is basically the same as gambling yourself which is not currently taxable. I don't think any distinction would be made between the two.

I agree that it is likely this entire area is under review and that we could see any number of ways in which poker could be taxed in the future. I think if it comes under the income tax code some deductions could/would be allowed for tournament buy-ins and travel expenses. Can't see why not if it is being treated as a profession. More likely in my view is that winnings will be taxed under CGT and losses/expenses won't be allowable for offset. This way the revenue gets a clean bite of any profits without worrying about any bad decisions you happen to be making

Anyways, we can speculate all day about what might happen in the future. Right now under the existing tax code the only potential tax exposures I could see related to poker is 1) related to people receiving significant sums in stake money which could be classed as a gift and liable to CAT. 2) Anyone receiving sponsorship (cash/tourney buy ins) which would almost certainly be classed as income.

As for record keeping that would be part of any change to the tax code and it would make sense if it was done in tandem with the regulation of the casino/gaming industry as a whole. That way the revenue could demand that clubs track winnings and possibly apply witholding in certain circumstances.

[Lplated]

Anyways, we can speculate all day about what might happen in the future. Right now under the existing tax code the only potential tax exposures I could see related to poker is 1) related to people receiving significant sums in stake money which could be classed as a gift and liable to CAT. 2) Anyone receiving sponsorship (cash/tourney buy ins) which would almost certainly be classed as income.

As for record keeping that would be part of any change to the tax code and it would make sense if it was done in tandem with the regulation of the casino/gaming industry as a whole. That way the revenue could demand that clubs track winnings and possibly apply witholding in certain circumstances.

The terms of the staking deal could influence the tax treatment. It may be a loan rather than a gift if it were ongoing stakes where prior loses had to come out of a win before division of profits.

Re sponsorship, the portion of it that related to simple appearance fees or obligation to do media interviews or related to clothing etc as distinct from a simple buy in is most likely income already, no?

The largest problem with this area, which i don't think was mentioned yet, is the way the law classifies gambling. Gambling [which the law may or may not include poker] is essentially not recognised at law, you can't enforce a contract where the subject was a gamble etc.... If one's income from gambling were to be taxable it would also lead to other changes in the general law.

[Xerxes]

Hi guys,

I've alreday asked the question, but better to be sure than sorry

We had the same situation in France for a lot of years : generally, poker winnings was considered as not taxable (by everybody : players, politics, even the revenue had not a clear position on it).

But a poker player go to a trial vs french revenue in 2010 about online poker winnings (2004-2009) and he lost it : he had to pay taxes on all these years.
Since, french revenue controls a lot of french poker player and ask them taxes (10 years back) with huge penalty. Maybe 100 french poker players have been controled in 2012.

I am worried than the same situation will happen in Ireland. I know a lot of your thinking are OK, but french revenue don't care : losers cannot be pro so they cannot deduce losses ; poker is gambling and luck but pros can decrease chance, etc...

What do you think about it ? Should I go in UK to be safe at 100% ?

[Fuzzy Logic]

Couple of posts from the old place:

Firstly - there is no tax liability from "Winnings from betting, lotteries, sweepstakes or games with prizes" .... so no tax on your poker winnings or from staking someone in poker. (Section 613(2) of the relevant tax legislation).

Poker is taxable in one of 2 ways (income tax or a tax on the rake) in the US, UK, Switzerland, Netherlands and a lot of other countries. It won't take too long for there to be a legislative change here in Ireland. Michael McDowell previously tried to implement regulatory legislation over casinos and poker when he was Minister for Justice.

OK - so here's the boring technical answer......

Income from Poker is treated under Capital Gains Tax (25%) legislation, as opposed to Income Tax (41%) legislation.

However, S 613 of the Taxes Consolidation Act 1997 (..told you this would be boring...) covers this off.

"Winnings from betting (including pool betting), lotteries, sweepstakes, or games with prizes shall not be chargeable gains.."

and for those who like to 'stake' people into tourneys

"...and rights to winnings obtained by participating in any pool betting, lottery, sweepstake or game with prizes shall not be chargeable assets."

TRANSLATION: It is tax free income. If it was a good enough excuse for our former Taoiseach to avoid tax problems, your sorted.

Your money in your bank account is as safe as a house / bank / Fianna Fail TD / ?????.

[NewApproach]

Couple of posts from the old place:

I'd be sceptical that s.613 applies to a professional staking setup,.

[ShipIt]

I left my job over 3 years ago to punt/playpoker...I couldnt claim welfare for many reasons so I was advised by my sister to pay €120 a year tax claiming I was self employed.
I have a history now, and have not literally vanished out of the system. I am told this is very important for pensions and so on.
We are obv very lucky to have tax free on gambling winnings but regarding blahhs solicitor that is quite funny, This is Ireland, if breeding horselines didnt get taxed I wouldnt worry about gambling with our ratio of winners to losers, less than 1% Irish gamblers win over any given year.

[kilclon]

PRSI on unearned income have any impact???

[NewApproach]

.

edit: This has been done to death. Speak to a tax advisor if you are unsure.

[kilclon]

Budget was today so I'm not sure where it has been done to death. I am asking if any changes to PRSI on unearned income which have come into effect will make any difference. Haven't looked too closely at the budget yet. Was just looking for a quick answer as my sister got me worried.

[markc]

Budget was today so I'm not sure where it has been done to death. I am asking if any changes to PRSI on unearned income which have come into effect will make any difference. Haven't looked too closely at the budget yet. Was just looking for a quick answer as my sister got me worried.

No impact.

[kilclon]

No impact.

Thanks

[Xerxes]

Hello,

I have looked again at the email I send to Irish Revenue last year and they have answered :

The general approach in Ireland to gambling winnings is that they are not liable to income tax or capital gains tax. Case law tends to indicate that if gambling returns stem from pure chance and skill plays no part, those returns cannot be regarded as a trading receipt.

But in poker, doesn't skill play a huge role ?

And can someone tell me where can I find the definition of "betting" in this sentence (from Section 613(2) of the relevant tax legislation) :

10.2 Winnings from betting (including pool betting or lotteries or games with prizes) are not chargeable gains, and rights to winnings obtained by participating in any pool betting or lottery or game with prizes are not chargeable assets.

[markc]

Hello,

I have looked again at the email I send to Irish Revenue last year and they have answered :



But in poker, doesn't skill play a huge role ?

And can someone tell me where can I find the definition of "betting" in this sentence (from Section 613(2) of the relevant tax legislation) :

Are u levelling? Tell u what. If the law changes to impact poker winnings ill post back in this thread. Promise. In the meantime chill out.

[Xerxes]

Nope, it is just I want to buy a house here in Ireland very soon, and I would like to be sure at 100% (I am a nit in poker and in life).

So maybe it will be better for me to move in UK if winnings here are not "safe" at 100%
(but I will prefer to stay in Ireland of course)

[Denny Crane]

They've 100% safe ATM, but don't go tapping the glass please.

[Xerxes]

Hello guys,

I have had an official answer from Irish revenue.

They advise me to fill the ROS online, and enter NIL profit for 2011 under Income From Trades, Professions or Vocations (because that is my only source of income).

Maybe law will change in the next future, but right now, poker winnings are not taxable (as stated by others in this thread).