Dragan Kostic Given 18 Months Jail Sentence for Tax-Dodging

Dragan Kostic will spend the next 18-months behind bars in a Spanish prison after failing to convince an appeals court to drop the tax-dodging charges levelled against him. The 55 year-old pro, originally from Macedonia, has been living in Spain for the past two decades, and in 2011 finished runner-up at the €5, 300 EPT Barcelona Main Event for €532,000 ($766,438), but apparently failed to pay any taxes on his huge windfall.
According to reports, Kostic should have declared around €233k on his 2011 tax returns, but he ended up claiming for a €1,300 refund, instead. In his defence, Kostic first claimed ignorance when initially quizzed by authorities, stating that he believed poker tournament taxes were automatically deducted by the casino. He then later tried to shift the blame onto his financial professional, who was responsible for preparing his tax returns in 2011.
In any case, the Provincial Court of Palma saw no reason to overturn a decision made earlier by the Criminal Court of Palma, and as an extract of the ruling published in Spanish media outlet ABC.es subsequently explains:
“It seems the least peculiar that a professional player, who participates in world tournaments and who wins prizes of such caliber, does not worry about the subject of taxation, rather, he does ensure that he knows if there is an obligation or not to [pay tax when that is the only profit and only income he has”.
Furthermore, Kostic’s argument were negated by the fact he had declared smaller wins of €7,750 and €20,000 that he earned in 2012 in another tax declaration, both of which were above the €2,500 non-taxable winning limit in Spain. Needless to say, Dragan Kostic’s mistake has proven to be a costly one, and in addition to his 18 month jail sentence, he will have to repay the required back taxes, as well as fork out a further €400k by way of a penalty.
Interestingly, Dragan Kostic’s 2011 tournament score of $766,438 represents the lion’s share of his $980,087 in winnings, with the pro only having earned $18,695 from live tournaments since the beginning of 2014. As a result, what should have been the crowning glory of his professional career will instead be remembered as the reason behind his fall from grace.