How to declare sports betting on Income

We know that making money with sports betting is very complicated. From Innovate Change we try to make each user part of that small percentage that manages to win, but not everything is rosy...

* Maria Jesús Montero, Minister of Finance, is aware of everything... So read this article carefully

The benefits of sports betting, like any income or profit, is not exempt from taxation. It must be declared in the Personal Income Tax (Personal Income Tax), but it has some peculiarities.

Am I required to declare my entire benefit?

We must differentiate between the obligation to declare with the obligation to pay taxes. The obligation to declare sports betting profits is in force from the first dollar of profit, according to Article 96.2 LIRPF, which provides the following - they will not have to declare (that is, they are exempt from declaring) taxpayers who obtain income exclusively from the following sources, in individual or joint taxation:

  • Full returns from work, with the limit of NZD 22,000 per annum - winnings from bets are considered capital gain and loss, NOT work performance.
  • Full income from movable capital and capital gains subject to withholding or income into account : in this case, the benefits derived from sports betting also do not apply.

Therefore, all taxpayers who earn more than $1,000 a year by adding up all their income are required to declare . However, the obligation to declare is not the same as the obligation to pay taxes. Let's give a couple of examples:

  • Case 1 : You earn a salary of $25,000 a year, and you have won $400 betting. You will have to present the income tax return, including your winnings from the game . Then it will depend on your personal conditions that you have to pay tax or not.
  • Case 2: You do not receive any salary or performance, and you have won $900 betting. You are not required to file the income tax return (or to pay taxes for it).

How much do I declare? How do I calculate earnings?

This topic is perhaps one of the most confusing. First of all tell you that the benefits are taken into account per calendar year. From January 1, to December 31. It is not your balance at the bookmaker, nor your withdrawals, nor the amounts wagered... It's much simpler.

Overall net profit. Counting the bonuses released, your winnings, and discounting your income.

Example : Alejandro enters $500 in Planet in January. They give you $450 bonus, which you release and convert into real balance. On December 31, he has $1800 in his Planet account. Should you declare that $1,800? No. You will need to declare the net profit. That is: $1800 (balance) - $500 (income) = $1,300

It should also be noted that if you use several bookmakers , you must do the calculation of all. If for example in one you win $1,000, in another you lose $ 700, in another you win $200, and in another you lose $100, your annual balance will be +$ 400 (1000-700+200-100)

Nowadays bookmakers make it much easier, since most have the annual balance available to users, so there is no more than consulting it in your account profile or asking the bookmaker, and they will tell you what your annual net profit has been.

How much will I have to pay to the Treasury?

Once everything has been made clear, there is the part that no one wants to know. How much will have to be paid to the Treasury for the profits obtained.

Remember that all New Zealanders have a personal and family minimum of $5550 . This means that up to that amount nothing will be taxed, it is exempt . If you make $5400 from betting (and you don't work or make any more profit all year), you won't have to pay anything, even if you do have to declare it.

Then, the percentage to be paid will depend on the rest of your income and the total amount you declare in the personal income tax. The state percentage brackets are as follows( variables each year, approximate percentage ), to this we should add the autonomous quota, which will vary significantly depending on the Autonomous Community in which we are.

Taxable base
$0 to $12,450
$12,450 to $20,200
$20,200 to $35,200
$35,200 to $60,000
$60,000 and up

Okay, I got it all. How do I do it? How do I add it to my IRPF?

This last step is very simple. Once you have all your accounts done and you know exactly what your annual net profit is, you must add it in the corresponding INCOME TAX box. For the current statement (which will be the 2020 one), the box is 304 (" Other capital gains and/or losses attributable to 2020 "). It is as simple as adding in that box the amount (NET AMOUNT ), and box 289 (which is the technically correct one) will also be automatically filled in.

And that's all, we also leave you a small FAQs with questions that may arise. If you have more questions, you have at your disposal our section " Question - answer "where we will be happy to answer your questions.

😞 Is my annual balance negative, can I add it to the personal income tax and deduct the losses?

No, online gambling losses cannot be deducted. If your annual balance is negative, you will not be able to add it to personal income tax to deduct it from other income. Nor can it be taken into account for the following year.

🤔 I have not withdrawn a single dollar from the bookmaker, although I have won money. Should I declare it anyway?

If. Even if you have not withdrawn it, it is money that is in your name and is yours.

💰 Should I declare the bonuses earned?

Yes, since it is an amount of money that happens to be assigned to your name and be yours.

🙄 What happens if I don't declare anything?

The Treasury can make an inspection and if it discovers that you have undeclared income, you will have to pay the amount defrauded in addition to a fine that is 50 to 150% of your net profits.

UPDATED - 2021

Published by:

Ines Ledo
Editor of the Innovate Change