Do you have to pay taxes if you win at an online casino in Canada? Good news! The answer is NO. Casino winnings are tax free in Canada. The Canadian government does not consider casino games as a lucrative activity. In fact, since these games are based on luck, they are perceived as entertainment. And you have to admit that it takes luck to win. That is why the Canadian Department of Finance does not tax casino winnings. It’s like with the lottery, when a lucky player wins, he or she doesn’t pay taxes. That goes for online casinos as well as land casinos in Canada.
Who pays taxes in Canada with casinos?
As said before, players do not pay taxes on their casino winnings. Whether these winnings came from a land casino or a foreign or Canadian casino site, all winnings are tax free. However, the casinos and their employees do have to pay taxes. Indeed, Canadian casinos are taxed just like all Canadian businesses. Of course, the managers and employees of Canadian casinos also pay taxes on their income. They do not have a privileged status.
Why will casino winnings never be taxed?
Apart from the fact that casino winnings are linked to luck, there is also another reason why they are tax free. If the Canadian government wanted to tax casino winnings, it would also have to accept that winning players could deduct the losses they incurred while gambling, as well as all related expenses (transportation costs, overnight stays, food & beverage, etc.). That would be a nightmare for tax auditors. In addition, it would undermine casinos’ attractiveness for consumers. It’s clear that taxing casino winnings would neither be good for casinos nor for the Canadian government. That’s why casino winnings are tax free and no bill will ever try to change that.
What about tax returns?
Not paying tax on casino winnings is a fact in Canada. When you hit the jackpot, you just need to report it as capital on your tax return. When drawing up your tax documents, you should record it as a capital gain, not as income. If you live in one province and you won at a casino in another province, it makes no difference.
Regardless of the situation, your winnings are tax free. Every tax lawyer knows this, and you should also know it so that you make no mistakes when filing your tax return. In general, it’s obvious that if you’ve earned a four or five figure amount, nothing’s stopping you from not declaring this capital, especially if you had fun with a few personal expenses. If you have any further questions regarding casino winnings, you can directly contact your provincial finance department. Every case is different, and it’s always a good idea to ask for advice in case of doubt.
An exception that confirms the rule with taxes
There is one exception with taxes on casino winnings. If a professional gambler makes a living from their betting skills, they must pay taxes on their profits. In this case, they file their tax returns in the same way as for a self-employed person. To be in this niche, the player must make a living from gambling activities. Of course, they can also have another job, but as long as their casino income is constant, they have to pay taxes. That goes for all types of gambling, whether it be casino games, poker, lottery, betting or bingo.
Last Updated on January 20, 2020 by Publisher