However, the industry might have started as a fun way to gamble from the comfort of your home. Now it’s an industry generating billions of dollars on a yearly basis. With this kind of yearly revenue, it is an industry that the Australian government is looking to tax.
Best Online Casinos in Australia
Online Casino Taxes?
There has been a concern among state treasurers in different regions in Australia. Seeing the federal government want to dip its hand into 15% of the point of sale consumption tax on online casinos. This taxation law was passed into law in 2017 and has made cut worth millions of dollars to the states.
The different regions in Australia have directly benefitted by taxing the casino operators. However, when the federal government step in and claim 15% of a very lucrative tax scheme then anger looms.
Keep in mind that these tax laws have no effect on players playing online casinos for real money. These players can be assured that their winnings will not be taxed. The battle for taxation in Australia is on the state and federal level. The council on Federal financial relations have met on several occasion to find an amicable resolution to the issue at hand.
A Brief History of Australia’s Gambling Tax Legislature
In Australia, winnings gotten by a means of gambling are considered not taxable. The reason for this comes in three-fold. The main reason why winning from gambling can be taxed is simply because in Australia gambling isn’t considered a profession. Gambling activities whethere is sportbetting is considered a recreational activity like a hobby.
The Australian government has passed laws to state that the result of a gambling session is usually not and not the result of hard work. Hence, the winnings cannot be taxed as it’s not a job, profession and requires no skill.
This also applies to a professional gambler like pro online poker players who might argue that their winnings a more of a result of skill. Even though they might argue this, their winnings are still not taxable.
However, if a pro player registers himself as a business that is recognized under Australian law. In this situation, the player will have to pay taxes. Also, if a professional player receives money from sponsorships, endorsement, or other means will be taxable by the government.
What are the Online Gambling Tax laws in Australia.
Australia has been passing new taxation laws to keep with the fast-paced online casino world for many years now. The most popular of this legislation that comes to mind is the Interactive Gambling Act of 2001. The legislation was passed into law in 2001, on the 28th of June. Prior to the passing of this law, there wasn’t explicitly any tax law that was aimed toward online casinos. Which meant many online casinos were able to set up shop in Australia and went years and years without paying any taxes to the government.
Online casinos offering Aussies casino games without a license is considered a criminal offence. While some might say this is a harsh punishment, we believe that licensed online casinos are the only place Aussie players should be playing.
The Interactive Gambling Act if 2001
Before the Interactive Act, Austalia was home to many unlicensed online casinos with rigged games and stealing users personal information. However, after the passing of the Act, we have seen a significant decrease in the number of unlicensed online casinos in Australia.
Accessing and using interactive gambling platforms is not an offence under the Interactive Gambling Act in Australia. Companies based in Australia are can sell their services to players residing outside Australia. The sole exception is certain nations that have been deemed ‘designated countries.’ Australian punters profit from not having to pay taxes on their gambling champions. However, there are not many Australian services when it comes to online games.
Although few are currently based in Australia, there is an international transaction fee that some consumers may have to pay in order to make a deposit or withdraw. This depends on what type of banking system you’re using.
For instance, Mastercard and Visa usually charge an international transaction fee. Whereas Skrill is not going to charge a fee. The question of currency exchange is also an issue. As some of the finest casinos accessible would not be able to play in the Australian dollar.
Do players have to pay any gambling taxes in Australia?
In Australia, it is the casino owners who pay taxes, not the players. The amount of tax paid by the operators depends on the type of game and the position of the poker machines or casinos.
In terms of several online Aussie casinos in service, there really is no taxation for online Australian players either.
The only payments or charges that a player can face while playing an online casino. There may be payments for withdrawing or depositing money at overseas casino sites or for exchanging the Australian dollar to the preferred currency of the website.
How much in taxes do online casino operators have to pay?
Since the law is clear that online casinos have to pay taxes on their returns. Now we will take a look at the different taxes that online casinos are subject to :
- GST at a rate of 10% upon the margin between the money collected and the amount of money paid out.
- Corporate federal income tax at a current rate of 30%. However, this is likely to result in a decline to the average of 25% by the income year 2021-22 by an annual reduction in the relevant tax rate. The allocation of the lower tax rate depends on whether the corporation listed as a base rate entity. Companies identified as a base rate entity are ones with an annual net turnover of less than AUD50 million. Also, 80 per cent or less of its taxable income is assumed to be a base rate entity with passive income.
- Payroll tax.
- Gambling levy taxes, which are levied by the applicable laws of the State or jurisdiction in which the corporation is licensed and is based on the income from gambling.
Point of Consumption Taxes
A casino operator, irrespective of where authorized, is also subject to a point-of-consumption (POC) tax in the following states and territories:
- South Australia: 15% of net state wagering income in excess of AUD150,000.
- NSW: 10% of net wagering income in excess of AUD1 million.
- Victoria: 8 percent of net wagering income in excess of AUD1 million.
- Queensland: 15% of taxable betting income in excess of AUD300,000.
- ACT: 15% of net wagering income in excess of AUD150,000.
- Western Australia: 15% of taxable betting income in excess of AUD150,000.
- Tasmania: 15% of net wagering income in excess of AUD150,000
- The Northern Territory has not revealed a measure to impose a levy on POCs.
Aussie players can rest easy knowing their winnings from an online casino are not taxable. However, players should be aware of charges from the payment option at an online casino. If you want to read about some of the best online pokies available to Australian players.
FREQUENTLY ASKED QUESTIONS
There are many steps you can do to ensure the safety of an online casino. Many of the casinos we suggest have been audited to ensure the confidentiality of your confidential information. Check out our page on healthy casinos to read more about what to look for.
No, most casinos have free play to help you get your bearings before you start playing for real money. The free games have the same chances as the real-money games, but they are not built to look better in order to entice you to play. It would be a breach of the law. What you see is just what you get!
Free spins, no deposit bonuses all have a slew of laws and regulations that you can include in their terms and conditions (T&Cs). These are non-negotiable and govern how the free spins would be utilised. In other words, if you deviate from or violate them, your payment will most likely be revoked.
The wagering requirement is the most relevant law or T&C. This is the smallest number of times your free spins winnings to be wagered or played out before you can cash them out. Another rule is that you should only play those games. Most casinos want you to use your free spins on one or a few specific games.