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Italian Revenue Takes Action Against Poker Players

by Ulrika Lomas, Tax-News.com, Brussels

21 July 2011


The Italian Revenue Agency and the Guardia di Finanza, the financial police, are taking action, aptly codenamed “All In”, over the taxable earnings of poker players on offshore media, such as dedicated television channels.

Earlier in the year, a letter was sent to professional online poker players, who had signed contracts with the principal Italian and international poker rooms, asking for information on their winnings, sponsorships, and income from image rights and royalties.

The current action looks to obtain information on the winnings of all Italian residents regularly playing poker (normally, it is said, “Texas Hold’em”), on offshore live media, such as dedicated television channels. After an initial analysis, it has been discovered that more than 4,000 players have been lucky there, and have made almost USD100m, without declaring this income on their tax returns to the Revenue Agency.

In particular, Italian taxpayers who obtained winnings between 2006 and 2009 are currently under the Revenue Agency and Guardia’s microscope. Those players, who have been traced, are invited to go to their local tax or Guardia office to explain if they have “forgotten” to declare their earnings on their annual tax returns.

Italian residents have, in fact, been reminded that the tax code is clear that all such winnings are to be considered as “other earnings”, and should be declared without deducting any allowance for expenses paid.

It was emphasized that it has been relatively easy for the Revenue Agency, from information it now has available, to identify all of those residents who take part in such games, and that the Agency intends to increase the tax compliance of those players who have operated under the mistaken belief that the tax liability of their overseas winnings could be considered to be a “grey area”.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: compliance | tax | tax compliance | royalties | offshore | gambling | offshore e-gaming | Italy | individual income tax

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