Are casino winnings taxable in Canada?
If you are an ardent casino player who plays for both the fun and the money, Canada is the place to be! If you are not a professional gambler who depends on casino winnings to make a living, you have nothing to do with the Canadian Revenue Agency. Perhaps that is why most people prefer to play in reputable sites like Wildz Casino when in Canada. The Canadian Revenue Agency view proceeds from casinos as mere luck or fruits of participating in a paying recreational activity and cannot be classified as income. Moreover, Canada also doesn’t recognize online casino gaming as business ventures, and so they find it unfair to tax players because they certainly don’t make a living from the same.
Well, it sounds interesting! Continue reading to learn about casino winnings and taxation in Canada.
- Why don’t you have to pay taxes?
Paragraph 40(2)(f) of the Income Tax Act exempts you from paying any form of taxes if you are not classified as a professional gambler. In other words, the law dictates that the taxing authority shouldn’t touch your winnings because the guiding principle is that playing casino games is done with after-tax dollars. For instance, winnings from poker games aren’t taxed if they don’t emanate from a business. The same law defines a poker business as a venture that must earn a recurring income and by pursuing profit, which is technically unrealistic. In other words, it is never a question of how much you win. The question is whether you are a professional gambler or not. The same applies to sports betting because authorities don’t see why they should tax a habit.
- Gambling and income tax
If you are playing at casinos as a professional, the Canadian Revenue Agency will enforce income brackets based on your net income, which is still the upside of taxation. In other words, you’ll only be taxed after deducting your losses and expenses. If you have a bad loss, you will be safe from the taxation ax during that period.
- Taxation in online and offline gaming
It is also important to note that the Income Tax Act doesn’t discriminate between online and offline gaming, and the same rules will still apply. The only difference is that for online casinos, the most classified game as “ professional” is only poker. Many Canadian players widely accept the skill component of poker.
- Gambling in a different country
Now, what about gambling from a different country? Well, being a Canadian citizen doesn’t necessarily exempt you from paying taxes when playing in a different country where withholding taxes is enforced on online and offline winnings. For instance, when you play from the US, the authorities can withhold up to 30% of your winnings in tax. However, you can still get back the withheld amount if you can prove that your gains from the same are minimum and don’t affect your financial situation in terms of elevation. For instance, you must be able to prove bad losses from playing casino games or casino expenses. Recouping your money while in the USA means that you’ll have to apply for a US tax number and fill the necessary application forms.
Awais is passionate to write about health, tech, education , finance as well as for business fundamentals & a little bit in igaming industry. He has an experience of 10 years in creating awesome & useful contents to deliver ideas/knowledge to people.
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