Will the Italian enforcement efforts to force reporting of on-line gaming winnings be implemented in the U.S.? How will the sites adapt to the reporting requirements? The following article is of interest on these points.
Online Winnings To Be Included In Italian Tax Returns, by Ulrika Lomas, Tax-News.com, Brussels Wednesday, January 05, 2011
On-line winnings, whether through betting or other games, are classified as ‘other income’ and therefore should be included on an individual’s tax return.
This was clarified by the Italian Revenue Agency, in a tax resolution issued on January 3, 2011. The Agency stated that all of the income from winnings realized on an online website that does not have an establishment in Italy, and which, therefore, does not withhold Italian tax at source, should be declared on a taxpayer’s return. Such income is subject to personal income taxation on the entire amount, without any allowable deduction for expenses incurred.
The Agency also explained that, if the taxpayer operates his gaming online by way of a non-interest bearing foreign bank account (with an example quoted of winnings made on an online casino by way of an account held by a financial intermediary in the Isle of Man), running the account could be classified as an external financial activity, subject to monitoring.
Please see full article below for more information.
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