Categories: Poker News
| Published On Nov 2, 2017 12:57 pm CET  |  Updated on May 2, 2021 11:55 am CEST | By iGaming Team

Israel Poker Pros Have To Pay Taxes To ITA On Winnings Overseas

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Israel Tax Authority (ITA) is making it mandatory for their country’s professional poker players to fill in a tax of 35% on their winnings overseas. Israel’s jurisdiction doesn’t allow private online gambling sectors are running in the country but only the government running gambling sites in selected cities of the country. Betting on sports and lottery is legalized in the country, and they have gained quite a customer base across the country over the years.

The idea of taxing poker players winning big prize money has been revolving around for decades now, but from last month, ITA raises the heat on professional poker players who win big tournament prizes overseas and then deposit that money in a foreign country’s bank. Israel has a tough time to digest this fact, so it decided to tax them at 50% under the category of business revenue as mentioned in their constitution. However, the real story of how much money did precisely the player win or has, after buying-ins or the basic customary rules of the tournament remains unnoticed as ITA doesn’t want to look into that deliberately, as many would say. Another hilarious fact is, according to Israel’s law that for games of chance, the tax levied on them should be 35% and not a fraction more. But the ITA believes that as these are all professional players acing these tournaments, winning big prize money now and then means they have been practising and sharpening their skills over the years. Now, whoever practices a craft daily and enhancing their skills should be considered as a Business person hence charging them 50% tax on their winning amount.

The tax agency holds hearings regarding these concerns to determine the exact income off and on the books of all the international players who appear to notch big tournament score overseas so that they can be taxed accordingly. Readers in the United States might recognise the irony in all this: It’s the exact opposite of the tax situation in the US regarding poker winnings. The IRS insists that poker is taxed as gambling winnings rather than business earnings because in the US it’s the gambling winnings that are taxed at the higher rate, a situation that led to the celebrated poker-income case pitting Billy Baxter against the US’s IRS way back around 1980. Some countries don’t tax gambling winnings. Unfortunately, neither Israelis nor Americans are lucky enough to live in one of those jurisdictions.