CJEU Rules Poker Money Won Outside Country Not Taxable
October 23, 2014 1:07 pmAccording to a latest ruling by the European Union Court of Justice (CJEU), poker players are not required to pay income tax on the winnings they have earned whilst playing poker tournaments in other EU countries outside their own state.
The case came to the attention of the European Union’s highest court after Team PokerStars member Pier Paolo Fabretti and fellow Italian pro Cristiano Blanco were targeted by the Italian tax authorities for failing to declare $66,000 and $610,000 in poker tournament winnings respectively earned outside of Italy.
Up until now, only those players winning money in Italian licensed brick-and-mortar casinos were exempted by the Italian government from paying income tax, but that rule has now been thrown out after Fabretti and Blanco appealed their tax bills to Rome’s provincial tax court. That court then further requested clarification from the CJEU, which subsequently rejected the Italian tax authorities’ stated concerns related to money laundering, explaining that “policy objectives cannot be used to validate discriminatory restrictions.”
Instead, the CJEU ruled that permitting an income tax exemption for just Italian licensed casinos represented a restriction on the freedom of trade, which could subsequently act to deter Italian players from traveling to other EU country for fear of losing their tax exemption. Handing down its judgement, the Luxembourg-based court stated:
“It must be borne in mind that the freedom to provide services under the EU constitution requires not only the elimination of all discrimination on grounds of nationality against providers of services established in other member states, but also the abolition of any restriction – even if it applies without distinction to national providers of services and to those from other member states – which is liable to prohibit, impede or render less attractive the activities of a provider of services established in another member state where he lawfully provides similar services.”