Online casino players may or may not wander what portion of their winnings they would actually see because many countries around the world tax casino winnings heavily. Canada is however quite a consumer friendly country and casino winnings are not taxed. They are rather seen as windfalls and the government kindly allows you to keep every cent.
Playing at online casinos in Canada is therefore quite an appealing activity because every last cent you win is yours and you won’t have to declare it or be hounded by the tax man. Canadian players can enjoy their online casino sessions without the worry about what they will have to pay to tax and all of their winnings, no matter how big the win is, will be theirs to keep.
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The Gambling Tax Law in Canada
According to the Canadian Income Tax Act, all online and offline casino winnings are not taxable. Players are not subject to paying tax because the law declares that any money won from placing a bet does not need to be taxed but the operators of the casino are on the other hand liable for paying tax.
This tax law is subject to change at any time but it does come from British legislature which was set a long time ago and there have been no changes or talks of changes since.
Casino winnings and any money won from some sort of gambling, sports betting or lottery activity is generally seen as a windfall and regardless of how much is possibly won, the amount is not subject to tax.
If any interest is however earned from the winnings, then the interest is taxable and anyone caught not paying this could be fined.
When Your Winnings Are Not Tax Free
The only time you may have to pay tax on your casino winnings is if you are a professional player. That is because the Canadian Revenue Agency’s stance is that “an individual may be subject to tax or income derived from gambling itself, if the gambling activities constitute carrying on the business of gambling.”
This is because it becomes the sole income of professional players so if you are a frequent player with a fulltime job who happens to win often, you still won’t have to pay tax on any of your winnings.
Taxes for International Casino Winnings
Playing at an online casino in Canada or even a land based casino in Canada means you are not subject to paying tax if you win. Canadians who play online do play at internationally based online casinos but this does not affect whether their winnings are taxable or not.
Canadians who play at land based casinos in other countries will have to pay the tax imposed in that specific country but casinos typically take that amount off as soon as the winnings are cashed out so there is little chance of getting away with not paying the required tax.
Overall, the gambling industry is massive in Canada and Canadians are rather lucky that they do not generally have to pay tax on any of their winnings.