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Monday, 20 January 2020 - As of late 2019 the Belgian tax authorities launched a new wave of tax audits with respect to the tax position of numerous high-profile Belgian poker players.
The main issue relates to whether the revenues from online and live poker activities are to be considered taxable professional or miscellaneous income or remain tax exempt. Compared to previous tax audits, the scope of the enquiries is a lot more extensive.
Belgian tax authorities are targeting high profile Belgian poker players. They are selected based on newsflashes on sector specific websites and results published on online poker platforms.
The tax authorities claim that the player’s activities constitute a professional activity for tax purposes. Live and online winnings are considered professional income taxed at the progressive tax rates up to 50% plus communal tax. Often the tax authorities also try to apply a penalty in the form of a tax increase, as well as late payment interests.
Not all poker players can be considered as professional players. For the vast majority these activities remain merely leisure or entertainment activities, which entails that the winnings cannot be taxed as professional income.
In the event that a player’s activities are deemed to be of a professional nature, one is still able to claim tax deductibility of expenses relating to the game (buy-ins, travel expenses, etc.). In order for the expenses to be deductible, it is however of the highest importance that they are well document and can be proven.
Also, for winnings derived abroad under specific circumstances a tax exemption can be claimed based on the relevant double tax treaties.
Should you receive a request for information from the tax authorities, do not hesitate to contact Daan Buylaert or Kimberley De Plucker for an analysis whether the position taken by the tax authorities is correct. We have particular expertise in the matter to guide you through the pre-court and court proceedings.
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