[Poland] Winnings from bookies to be taxed

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The taxation of winnings depends on whether or not the games are organized and conducted by an authorized entity operating within the gambling regulations of a member state of the EU/EEA.

Gambing and betting on sports for entertainment is nothing new. In ancient times bets were made at gladiator fights or chariot races. Betting on horse races was fashionable in 18th century in London. However, thanks to the Internet, betting has become extremely popular and accessible. Not only can we bet on sports, but also on presidential elections and other events. What’s more, the bookmaker can be located anywhere in the world.

The sum of the winnings depend on the rate set on the result by the bookmaker, applicable when the bet is made.

The taxation of winnings depends on whether or not the games are organized and conducted by an authorized entity operating within the gambling regulations of a member state of the EU/EEA.

In the first case, winnings of up to 2280 PLN are tax-free under art. 21, par. 1, pt. 6a of the Personal Income Tax Act, which states that winnings from numbers games, lotteries, bingo, mutual bets, promotional lotteries, audiotext lotteries (i.e. calling or sending a text message via a public telecommunication network) and prize lotteries, are tax-free if the individual value of the prizes does not exceed 2280 PLN.

Higher winnings are taxed at a 10% flat-rate tax, based on art. 30, sec. 1, pt. 2 of the Personal Income Tax Act. The taxpayer does not have to independently pay taxes on winnings or make any declarations to the tax authorities. It is the bookmaker who is responsible for calculating and paying the tax, as well as sending a PIT-8A declaration for flat-rate income tax to the authorities. Winnings made by an entrepreneur are an exception, as long as they result from their usual business and therefore should be included as income.

In compliance with the provisions of the abovementioned law, all winnings from competitions, games, mutual betting or prizes associated with the sale of promotional items are taxed with a flat-rate income tax of 10%, as long as the winnings were obtained in a member state of the EU or another country belonging to the EEA.

In accordance with the disposition of art. 20, par. 1 and in connection with art. 10, par. 1, pt. 9 of the abovementioned act, if the game is organized by an entity from outside the EU or EEA, the winnings should be reported in an annual tax return as income from other sources. This income will be taxed based general principles, according to the tax scale. It must be submitted in a PIT-36 tax form (which includes other incomes). The form is due by April 30 following the fiscal year in which the income was obtained from the winnings.

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