15 11 2014
Italian Poker Players Win Big–In CJEU Tax Case
A decision by the European Union Court of Justice late last month has shelved a dubious application of tax law to Italian professional poker players winning in overseas tournaments. The court has reasoned that professionals such as Pier Paolo Fabretti and Cristiano Blanco will not be targeted for income tax on inter-EU tournament winnings, citing a conflict with the European Union’s freedom of trade.
Italian legislation does not require gamblers to pay income tax on winnings made at licensed land-based casinos within Italy, but has previously levied income tax on all winnings made elsewhere. Fabretti and Blanco were both targeted for failure to report and pay taxes on such winnings.
In its decision, the CJEU claimed that the legislation impeded free trade and discouraged emigration from Italy, as leaving players would lose their tax exemption for winnings inside Italy. The Italian government defended the legislation as a reasonable measure for protecting players, arguing that the laws allowed domestic casinos to be made safer, but ultimately the CJEU found the law to be in violation of Articles 52 and 56 of the Treaty for European Union.
““The national legislation, by restricting the benefit of a tax exemption only to winnings from games obtained in the Member State at issue, makes the provision of services constituted by the organization of gambling for remuneration subject to different tax arrangements depending on whether that service is carried out in that Member State or in other Member States,” said a representative of the court.
This is not the only ruling from the EU regarding the gambling laws of nations’ states in recent months. Sweden saw itself on the wrong side of a ruling by the EU Commission just several weeks ago, for similar reasons—violations of the EU freedom of trade laws.