Making sports bets on the Internet is legal in Germany, but the question of whether any winnings made in the process have to be taxed is one of the most difficult issues surrounding sports betting.
Popularity Fiscal treatment Professional sports bettors Unreliable providers Itemized
The popularity of sports betting
Sports betting is a popular pastime in Germany among people who are enthusiastic about sports and want to increase the thrill of watching sporting events by placing sports bets.
The reason why sports betting is so popular in Germany, apart from the thrill, is the prospect of winning money. Depending on which bet you place and which provider you are active with, a single tip can earn you a proud sum of money.
In addition to individual bets, so-called combination bets, in which several individual bets are combined into a total bet, are a popular form of sports betting. A large profit can be made here. However, the risk is that one wrong result can ruin the whole combination.
Successful sports betting
Various factors distinguish a good from a bad sports bettor:
Taxation of profits and betting tax
At the latest when the hoped-for big win is there – whether by chance or by accurate analysis – sports bettors deal with the issue of taxation.
The good news is that winnings from sports betting in Germany do not usually have to be taxed.
While it is true that such winnings are income to a certain extent, the income that actually has to be taxed is regulated in paragraph 2 of the Income Tax Act. Sports betting is not mentioned in the list to be found here, so there is no tax either.
One reason why the state has not yet tapped sports betting as a source of revenue may be that some sports bettors make not insignificant losses and could otherwise claim them as losses accordingly.
– Failure to pay tax on winnings should not be confused with the fact that a player must nevertheless pay the betting tax, unless the provider assumes this. This comes from the so-called Racing Betting and Lotteries Act, where the percentage of the gross stake is 5.
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– Class 1 (single or divorced) – Class 2 (for single parents) – Class 3 (married, higher income) – Class 4 (married, same income) – Class 5 (married, lower income) – Class 6 (for the side job, if there is another main job)
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Profit taxation as a professional gambler
Sports betting lacks the so-called participation in general economic traffic, which is required under § 15 para. 2 sentence 1 EStG one of the characteristics for a commercial enterprise is. Professional gambling is therefore usually not to be registered as a business.
In contrast to professional poker players, professional sports bettors do not usually have to pay tax on their winnings, as there is no exchange of services. However, the betting tax is also due for professional players.
– Sports betting providers that do not charge betting tax are extremely popular not only among professional players and have a decisive competitive advantage over other providers. In principle, the betting tax is namely payable by everyone who has his residence in the Federal Republic of Germany.
A provider who pays the betting tax of its customers fully itself is the bookie Tipico, which is very well known in this country. In plain language, this means that players actually do not have to fear any deductions here and accordingly a potential profit is fully preserved.
Sports betting provider
But what distinguishes renowned sports betting providers on the market from each other at all??
1. Offer 2. Odds 3. Service 4. Actions
The variety of the offer often takes a similar importance as the odds for sports bettors. But also a good service is often profitable, as well as lucrative deposit bonuses and promotions for existing players.
Avoid dubious sports betting providers
What is the legal situation in Germany?
The legal situation in Germany is such that the state keeps a watchful eye on the awarding of licenses and the respective providers have to fulfill the corresponding requirements before obtaining a license.
How to protect yourself from dubious providers?
The regulation of sports betting on the Internet is not easy, so it happens that black sheep can take the money of trusting players. These dubious betting companies not only harm the players themselves, but at the same time bring the reputation of the entire industry into disrepute.
Serious suppliers always have a valid imprint. The mere fact that a provider is based abroad is again not an indication of a lack of seriousness.
Transparency at every conceivable point can be seen as a good sign. This also applies to the existence of many positive customer reviews at various portals.
1. Federal Ministry of Justice and Consumer Protection: Income Tax Act>>