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I would like to know Are sports betting winnigs are taxable…

Hello My name is***** would like...
Hello
My name is***** would like to know Are sports betting winnigs are taxable in Australia or not?
For example i do online sports betting as professional and get 3000 australian dollars every month from bookmaker. Do i need to pay taxes as Australian resident and citizen?
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Answered in 9 minutes by:
3/8/2018
Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 46,702
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
Verified

Hi, I am Leon, a NSW Solicitor. I am reviewing your question and will reply again in a moment.

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Good Morning

They are taxable if you are doing it as a business.

But as one off now and then, they are not taxable.

So if you are not a professional punter and do it as a business you are not taxed on your winnings.

Here is a ruling from the department

http://law.ato.gov.au/atolaw/view.htm?locid=%27FOI/1012874P

It has to be a business of betting to be taxed

If you wish to have a phone call to discuss this in more detail please elect a call or I can send you a request.

I hope this makes sense and is of assistance. If you have found my answer to be helpful, please rate me five stars so I can get paid for my services to you. I am happy for you to ask further questions on anything you wish more detail on.

Let me know if I have answered your question today.

Regards

Leon

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Customer reply replied 4 months ago
They are taxable if you are doing it as a business.
Could you explain me this
For example i bet by myself on offshore web site and get 3000 or 6000 AUD every month. Do i need to pay taxes?

Good Morning

If you have this as you only income and you do this for a living then you are taxed on it.

If it is a regular activity such as you have described then the ATO can see it as a business and you have to pay tax. If you do it once or twice a year then it is not a business.

They look at how regularly you do the activity.

So monthly may be seen as a business.

If you look at the ruling I have sent you it sets out what they found to be a business and that is what is applied to each case now.

I hope this makes it clearer.

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Customer reply replied 4 months ago
but here it says that is tax free
https://www.casino.org/australia/guide/

Good Morning

This website is not australian based and is only very general.

The ATO will tax gambling money from professional gamblers.

If the activity is regular then the ATO will tax you.

Please read the Law as the Court has stated for punting on the link I have sent you.

Here it is again.

http://law.ato.gov.au/atolaw/view.htm?locid=%27FOI/1012874P

It is helpful and it will assist you.

If you fit the description in that ruling you will not be taxed. But it gives good guidance.

But there are many people that gamble that have had their winnings taxed because of the character of their activity.

If you fit the description in the link I have sent you you may be exempt and this case sets out what has to exists to be taxed.

But do not rely on international sites that are very vague.

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Customer reply replied 4 months ago
How many % i have to pay?
Customer reply replied 4 months ago
For example i gain 100 000 AUD per year

Good Morning

It is added to your income and it is taxed as part of your total income.

I cannot tell you the amount of tax

Here is the link that shows the tax rates in Australia for residents

https://www.ato.gov.au/Rates/Individual-income-tax-rates/

I hope this makes sense and is of assistance. If you have found my answer to be helpful, please rate me five stars so I can get paid for my services to you. I am happy for you to ask further questions on anything you wish more detail on.

Let me know if I have answered your question today.

Regards

Leon

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Customer reply replied 4 months ago
But if i would have 2 passports. For example maltese and Australian. All my operations will be on Maltese passport. I still pay australian taxes?

Good Morning

If you are a resident in Australia you have to pay tax in Australian on worldwide income.

If you are a permanent resident in Malta you pay tax in Malta.

Your passports do not determine your tax liability your residential status does.

So if you have permanent residency in Australia the tax is paid here.

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Customer reply replied 4 months ago
I am actually a Russian citizen. Me and my wife planning to come to Australia for one year to study english. In that case do i have to pay taxes?
Or my wife goes to University and get study visa and bring me to Australia as husband. It that case do i need to pay taxes?

If you live here then you have to declare the income here.

If you do not live here then you do not have to pay taxes here.

Only if you live here do you have to pay taxes here.

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Customer reply replied 4 months ago
But what about my taxes in Russia for non- resident? i have to pay 30%
Also could you explain me in what section of link you provided to me says that as professional gambler i have to pay taxes? I just dont get it.
I was thinking that it is related to a bussines not a person
Customer reply replied 4 months ago
I just place bet as individual and i do not organize any gambling bussiness in Australia.

Good Morning

The law here does not say tyou are taxed on gambling.

The law says you are taxed on income.

If the Tax Department looks at your activity and decides that it is a regular and systematic earning of income you will have to pay tax.

They have made many decisions some that say it is not a taxable activity and others that say it is.

Many gamblers do not pay tax but at the same time others are found that they have to pay tax.

Each case is looked at on its own merits.

The following ruling from the Australian Taxation Office sets out what they look at in gambling income cases to decide if you are carrying on a business. If you are then you will be taxed

https://www.ato.gov.au/law/view/document?DocID=ITR/IT2655/NAT/ATO/00001&PiT=99991231235958

Here are the 3 cases that are mentioned. In the first one they were not taxed in the second and thrid they found that they had to pay tax

3.In Evans, the Federal Court (Hill J) was prepared to assume that mere punting could constitute a business but decided that on the facts of that case the taxpayer was not carrying on a business. Hill J. stated that if a mere punter is to be held to be carrying on a business it will be because the relevant betting activities will be systematically conducted so as to get the most favourable odds obtainable. Volume of punting and size of bets of themselves are not, in his Honour's view, determinative of the outcome, although neither can be said to be irrelevant. Hill J said that what was lacking to characterise the taxpayer's gambling as a business was the element of system or organisation. The taxpayer did not maintain an office or employ any staff to assist him, he did not keep any records, he did not use a computer or subscribe to any tipping or information services and did not spend a lot of time studying form. In particular, his Honour said, the taxpayer's preference for betting with the TAB or on course totalizator, rather than with bookmakers, and his tendency to invest in quinellas, trifectas and other exotic kinds of bets seemed "inconsistent with the money-making, systematic, businesslike character which is an essential ingredient in the carrying on of a business". The taxpayer's winnings were therefore not assessable.

4. In Babka, the Federal Court (Hill J) again proceeded on the assumption that mere punting may constitute a business but, as in Evans, found it unnecessary to reach a final conclusion on the matter because, even if betting activities are inherently capable in some circumstances of constituting a business, the facts of the case did not reveal the taxpayer to be carrying on any business at all. His winnings were therefore not assessable. The taxpayer did not follow any betting system but he did place bets in accordance with several guiding principles. Judgment and instinct both played a part in the taxpayer's selection of horses on which to bet as well as in his choice of the amount and type of bet placed. That was sufficient to negate the concept of system and organisation which is the hallmark of a business. The taxpayer's activities "could [not] be said to exceed those of a keen follower of the turf". Hill J indicated that today mere punting, particularly with the growth of modern technology such as computers, could be so organised, systematic and businesslike and so dedicated to profit-making as to constitute a business. However, his Honour went on to say that the intrusion of chance into the activity as a predominant ingredient at least in the outcome of the race itself suggests that it will be a rare case where a court will conclude that the activity is a business.

5. The Full Federal Court (Pincus, French and Gummow JJ) in Brajkovich stated that gambling, as ordinarily conducted by members of the gambling public, would seldom be a business even where large gains or losses are involved. In that case, the element of sport, excitement and amusement was the main attraction for the taxpayer and it could not be said that a business was being carried on. The Court said that the principal criteria for determining whether gambling constitutes a business include the following : whether the gambling is conducted in a systematic, organised and businesslike way; the volume and size of the gambling; whether the gambling is related to, or part of, other activities of a businesslike character e.g., breeding horses; and whether the gambler appears to engage in his or her activity principally for profit or principally for pleasure. On the basis of those criteria, the Full Court concluded that the taxpayer's gambling did not constitute a business and therefore the gambling losses he had incurred were not deductible. The evidence showed that he had from his youth a simple passion for gambling on a large scale and "merely indulging that, without more, is not engaging in a business". The Court added that gambling which involves a significant element of skill is more likely to have tax consequences than gambling on merely random events.

I cannot comment on Russia.

A person in Austtralia can carry on a business in their own name. They do not have to be a company.

The cases in the ruling they were people not companies.

But each case is looked at on its own merits.

I hope this is clearer.

But when you arrive if you do, you should speak to an accountant and they will give oyu more information and even request a ruling fro your personal situation and if the Tax Office decides you are not carrying on a business you may not haver to pay tax. But they look at each person on their own situation.

As you can see it is not a simple matter.There is no yes or no answer when it comes to taxes.

I hope this is clearer.

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If it is a one off bet it is tax free

Ask Your Own Australia Law Question
Customer reply replied 4 months ago
they basically see my incomes and think that i do a bussiness?
How they will understand that is taxed or not? And how i have to be sure that i dont do wrong something?

Good Morning

The best way is when you arrive you see an accountant and get a ruling form the Tax Office.

This way you know 100%

Otherwise you can look at the ruling. If you believe that you fit the first example, you do not do returns. If the ATO decide to check you then set out the facts and ask then deal with it according to the first example. If they agree no tax.

If they do not agree then they will assess you on the income you have earned.

But most would ask them for a ruling so they are 100% certain of their position and when they give it then you are protected.

Ask Your Own Australia Law Question
Customer reply replied 4 months ago
i do bets in offshore web site in Malta. Do i fit requirements for section 3?
How they will check this if i do it at home
. The taxpayer did not maintain an office or employ any staff to assist him, he did not keep any records, he did not use a computer or subscribe to any tipping or information services and did not spend a lot of time studying form.

Good Morning

I cannot say if you fit the requirement.

You are asking me now to give you a yes or no answer that is not possible.

If you believe that you fit the first example then you would not declare the income. But I cannot say if you do or not.

No Solicitor or Accountant would just say yes or no.

I cannot tell you more than I have

If you wish to have an answer as to yes or not only the ATO can tell you and that requires a ruling.

I am sorry for not being able to do that.

Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 46,702
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
Verified
Leon and 87 other Australia Law Specialists are ready to help you
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Customer reply replied 4 months ago
Ok. I understand
Thanks for consultation
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DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

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