The Highs and Lows: Gambling Winnings Tax. There is a huge disparity in the quantity of tax collected across legal gambling jurisdictions. In some countries, punters can expect to lose up to 10% of their winnings to the taxman, whereas in other countries this can be between 1-3%.

1. Gambling Tax Hk 2020
2. Gambling Tax Uk
3. Gambling Tax Hk 2019

1. Nonresident Gambling. Generally, nonresident aliens who gamble in the United States must pay U.S. Tax on their gambling income won in the United States; however, the United States has tax treaties with 27 countries (see IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities) that exempt their citizens from tax on U.S. Gambling winnings.
2. When it comes to punters who use illegal online gambling sites, too, the Hong Kong authorities have no way of levying tax on winnings. They can, however, prosecute individuals who do take part in illegal gambling and impose prison sentences and fines. Deposit Methods: What Works?
3. The Hong Kong Jockey Club (HKJC) is structured as a non-profit, so 79% of all gambling proceeds are put back into the economy through taxes and charitable donations. HKJC is the most significant single taxpayer in Hong Kong and employs nearly 25,000 in staff. The Legal Status of Gambling in Hong Kong Is Online Gambling Legal in Hong Kong?

Introduction

Hong Kong is one of the most attractive places in the world for investments in securities, such as shares, bonds, funds, futures and options. As a result, typical questions that may arise are related to i) whether the income/gains derived from those security investments, such as dividends, interests and disposal gains, are subject to any Hong Kong tax at the level of the recipient; and (ii) whether there would be any possible ways to mitigate the tax exposures, if any, in Hong Kong.

Relevant Hong Kong tax rules

Under the territorial source system, Hong Kong does not impose profits tax on a person (including a natural person, a company, a partnership and a trustee) if (i) the person does not carry on a trade/business/profession in Hong Kong from which the income is derived; and/or (ii) the person’s income is not arising in or derived from Hong Kong (i.e. not sourced in Hong Kong) pursuant to the general charging provision of the Inland Revenue Ordinance.

Also, Hong Kong does not levy any profits tax on gains arising from sales of capital assets (i.e. gains of capital in nature). As such, even in case a person would be carrying on a trade/business/profession in Hong Kong whereby the gain is sourced from Hong Kong, the gain will still not be taxable in Hong Kong as long as it can be qualified as capital in nature.

In view of the above-mentioned tax rules, investment income/gains can potentially be exempt from Hong Kong tax, but only as long the required conditions can be met.

Not carrying on a trade/business/profession in Hong Kong?

A company is generally considered as carrying on a trade/business/profession in Hong Kong if it is managed and controlled in Hong Kong, such as BVI company whose directors are residing in Hong Kong. In practice as well, the Hong Kong Inland Revenue Department (“HK-IRD”) considers a company incorporated in Hong Kong as a company that carries on a trade/business/profession in Hong Kong. As a result, it is more likely than not that such Hong Kong company, being a recipient of investment income, will be subject to Hong Kong tax (unless such income is satisfied as sourced outside of Hong Kong and/or capital in nature as further discussed in the paragraphs below).

For individuals however, when participating into security investments, different tests apply in order to test whether they carry on a trade or business in Hong Kong. Factors to consider for such individual are, but not limited, (i) his/her motive; (ii) whether or not the buying and selling of securities can be considered as his/her full time job; (iii) the length of his/her ownership in the securities; (iv) whether he/she has carried out successive or frequent similar transactions in the past; (v) whether he/she is relying on securities trading as the sole or dominant source of his/her income; and (vi) his/her reasons for the disposal of the securities.

Consequently, it can be argued that an individual making investments through a broker securities account, a rather popular activity in Hong Kong, is carrying on a trade/business in Hong Kong and that his/her income derived from those investments should be subject to Hong Kong profits tax.

Income not sourced in Hong Kong?

As a result of various case law and additional guidelines from the HK-IRD, different tax rules and tests are available for determining the source of the various types of investment income.

For example, in order to determine the source of interest, one may need to consider whether or not the provision of credit test is applicable. For example, if the funds have first been made available by lenders (e.g. bond holders) to borrowers (e.g. bond issuers) outside of Hong Kong, the provision of credit is likely to have taken place outside of Hong Kong, resulting into the interest income of these bonds to be sourced outside of Hong Kong and therefore non-taxable with Hong Kong tax. Please note that this test cannot be applied in all circumstances.

The source of gains from sales of investment securities, are however again subject to a different test. Major considerable factors include, but not limited to, (i) whether or not these securities are listed on a stock exchange; (ii) on which stock exchange these listed securities are being traded; (iii) from where the sale contract and purchase contract of the unlisted securities/securities traded through over-the-counter are being effected.

One has to note that the HK-IRD/the Court may also apply the totality of facts test (i.e. looking at all relevant factors/business activities) in determining the source of interest income and disposal gains. Further, the fact that there is no tax due in Hong Kong does not mean that taxes are not payable in another tax jurisdiction.

Gains of capital in nature?

In general, gains from sales of investment securities held for long-term investment purpose can potentially be qualified as capital in nature and thus non-taxable whiles those securities held for short-term trading purpose are trading in nature and taxable. Again, it is necessary to look at all the relevant facts and circumstances of each case when determining the nature of a gain. The relevant factors include but are not limited to (i) the taxpayer’s intention at the time of acquiring and holding the investment securities; (ii) the length of ownership of the investment securities; (iii) the frequency and regularity of conducting similar transactions; (iv) how the acquisition of the investment securities has been financed; (v) the reasons of the disposal; and (vi) the principal activity of the company (if applicable); and (vii) the classification of the investment securities in the company’s balance sheet (if applicable).

There have been a lot of tax disputes between the HK-IRD and taxpayers on the above-mentioned tax issues, some of which are appealed to the Board of Review (i.e. a tax tribunal) and even to the Court for determination. If one would like to conduct a tax review/analysis on a particular case(s), please feel free to contact us on +852 2804 0889 or by email taxservices@www.hkwj.xn--0deaa2cva.com.

• Services
• EN

All types of gambling are legal in Hong Kong but the government keeps a very close eye on what’s happening and regulations are tight.

That being said offshore operators do offer online gambling to residents of the country which we’ll detail below along with a full overview of the situation and rundown of all key laws relating to online and offline gambling.

Betting Sites Available In Honk Kong:

Gambling Tax Hk 2020

We only know of one betting site available to use if you’re a resident in Hong Kong and that’s 188bet.

Key Facts: Online Gambling In Hong Kong

• Online betting and gambling legal with licensed operators (since 2006).
• Football betting (soccer) is the most popular with punters.
• Legal gambling age is 18+.
• Overseas providers legal with a license (current non exist)
• Offshore operators continue to serve customers in the market.

Gambling Legislation & Laws

Often the best way to understand the legal situation surrounding gambling in any given country is to look back through the legislation passed over the years. The following timeline allows you to do just that for Hong Kong’s gambling industry:

1977 – The Gambling Ordinance

It was in 1977 under the Gambling Ordinance that gambling was first legalised and regulated in Hong Kong.

That piece of legislation determined that gambling was only legal in certain licensed gambling establishments and established a monopoly over lotteries, horse racing betting and other sports betting for the Hong Kong Jockey Club.

2002 – The Gambling (Amendment) Ordinance

In 2002, the Hong Kong Legislative Council passed the Gambling (Amendment) Ordinance. This piece of legislation banned all offshore gambling, including offshore internet gambling but did allow for the Hong Kong Jockey Club to offer some online gambling services in the shape of selling lottery tickets and providing horse racing and football betting.

It was this legislation, too, which set down the potential punishments for anyone found operating or using illegal offshore and internet gambling services. These are that representatives of providers can be jailed for up to seven years and the company fined $5 million HKD, and that users of the services can be imprisoned for up to nine months and fined $30,000 HKD.

2014 – Home Affairs Bureau Announcement

Gambling Tax Uk

In spite of the 2002 legislation, overseas online gambling operators continued to cater for Hong Kong citizens. Whilst this is illegal and the Hong Kong authorities do not condone it, the Home Affairs Bureau did state in 2014 that they would not seek to block access to unlicensed betting websites.

Tax On Winnings?

Another important element of any country’s legal stance on gambling is how the activity is viewed when it comes to tax. In Hong Kong, the situation is mercifully simple as there is currently no mechanism at all for punters to be taxed on their winnings.

In the case of legal gambling provided through licensed establishments and organisations such as the Hong Kong Jockey Club, it is those companies who are taxed and not their customers. When it comes to punters who use illegal online gambling sites, too, the Hong Kong authorities have no way of levying tax on winnings. They can, however, prosecute individuals who do take part in illegal gambling and impose prison sentences and fines.

Deposit Methods: What Works?

Most Hong Kong banks and credit card providers do not allow their customers to deposit to illegal overseas gambling providers. As such, credit or debit card deposits often have sporadic success.

Gambling Tax Hk 2019

Instead, many of those punters choose to deposit with their chosen sites through e-wallet services such as Skrill or Neteller. These services offer a kind of buffer between the gambling sites and a customer’s bank, and in many cases it is only the name of the e-wallet which shows up on a bank statement and not where the money ultimately goes.