The gaming tax is the tax levied on recreational activities involving several people who normally contribute an amount of money. Thus, one or more winners are selected by chance.
In other words, to put it simply, this tax is the one levied on games of chance, such as lotteries, bingos, raffles, among other similar ones.
This tax has different characteristics, depending on the legal framework of each country. Thus, the tax rates vary, the entity in charge of collection or the frequency in which the tax must be paid, among other details.
Likewise, according to the type of game of chance, the tax base will be different. For example, if it is a lottery, it could be the market value of the prizes offered.
It is also worth noting that not all countries have established a tax on gambling.
Gambling tax in Spain
To see an example, the gaming tax in Spain constitutes the authorization, celebration or organization of games, raffles, contests, bets and random combinations for promotional or advertising purposes as a taxable event. This at the state level. In addition, lottery games are noted as an exception.
Likewise, Spanish regulations include online casinos as taxpayers.
Depending on the type of game, the following modalities of application of this tax are considered:
- On gross income: That is, on the total amount paid by those who participate in the game.
- On net income: In this case, the amount of the prizes is deducted from the total income received from the participants.
- On commissions and other income: In this case, the tax base corresponds to the commissions or services (paid by the players) related to the activities of the game. This, when the taxpayer does not receive the amounts played as income, but transfers them to the players who would have won.
- In the case of random combinations for advertising purposes, the tax base will be the market value of the prizes offered.
In the Peruvian case, the gaming tax is also levied on activities such as lotteries, bingos and raffles.
The taxpayers are the companies or entities that organize the activity, as well as the individuals who win and obtain the prizes.
Another important detail is that the collection of the tax is mainly in charge of the municipality of the respective district. It should be explained that in Peru there are several territorial jurisdictions called departments. In turn, each department is made up of several districts, each of which is headed by a mayor elected by popular vote. Thus, the districts are relatively small jurisdictions.
The tax base for bingo games, raffles, raffles and the like is the face value of the ticket or game card. On the other hand, in the case of lotteries, it will be the value of the prizes. And if the prize is an asset in kind, the market value of said asset will be taken as a reference.
At the time of writing this article, the rate of this tax in Peru was 10%.