In recent years in Andorra, gambling, poker and betting have been regulated through policies to prevent pathological gambling and promote responsible gambling, while retaining significant tax benefits for those who are professionally engaged in this field.
What taxes do online poker players pay in other countries?
In most countries winnings from poker tournaments are to be considered as capital gains.
This consideration is due to the fact that whoever wins a game incorporates money, or goods and rights in the case of prizes in kind (i.e. platinum VIP passes, hotel expenses, cars, etc) to his or her estate, and therefore must pay for it.
Therefore, the qualification of capital gains and losses that are taxed in the Income Tax, is the one that should be granted to the results that can be obtained by such participation in bets and online games.
It is important to note that, when calculating the winnings, it makes no difference whether or not the player has withdrawn the profits from the online gambling operator.
Why do poker players move to Andorra?
As with almost any other profession, those who engage in poker professionally can benefit tremendously from Andorra’s tax flexibility.
While there is a gambling law in the Principality, it does not directly address practices such as online poker, meaning that there are no rigid rules or regulations in this regard.
Since online poker players travel for most of the year, many look for low-tax countries to settle in, with Andorra being one of the favorite destinations for online poker players.
How are poker winnings taxed in Andorra?
With respect to the taxation of more than 50% that could be reached in other countries, in Andorra income from poker would be taxed at a maximum of 10%.
Poker winnings in Andorra are considered a capital gain of the savings income, being exempt the first 3,000 € of profit and taxing the rest at a maximum of 10%.
Since the poker income will be received from games carried out in online casinos or casinos outside the Principality, these will not be able to benefit from the exemption provided for income from gambling authorized in the Principality.
How is the other most common income received by poker players taxed?
Poker players also receive many different incomes from winnings.
Unlike online poker winnings, which are considered as savings income with an exemption of only €3,000, income derived from the salary of a team (poker stars), affiliate marketing and prizes in kind (VIP passes, hotel stays, cars, jewelry, watches), would go to the general tax base, with a full exemption for the first €24,000.
The maximum taxation of this income will also be 10%,
Other advantages of playing online poker in Andorra
People who are fond of or are engaged in playing poker online will find themselves with another series of advantages:
- There are no computer IP limitations. Players can enter any room regardless of geographic location.
- There is a large community of people who are dedicated to this game.
- The Internet connection is among the best in the world. The Principality has fiber optics in the entire territory.
- Andorra is very close to the Casino de Barcelona, one of the most important organizers of poker tournaments.
Principal difficulties for poker players in Andorra
The Principality of Andorra has been a haven for dozens of online poker players and gambling professionals.
However, it ceased to be an attractive destination because of the difficulties that many banking institutions placed on opening a bank account in the Principality of Andorra (necessary to exercise a business).
Gambling is generally an unregulated sector that banks tend to reject.
For this reason, in the case of wanting to reside in Andorra, the poker player must be self-employed (not betting on behalf of third parties) and generally register as a person linked to the world of digital marketing.
For this very reason, professional advisors such as those of AndorraInc are necessary to manage a possible change of residence.
How to settle in Andorra
For the above reasons, more and more professional gamblers and poker players are taking advantage of Andorran taxation.
To do so, it is essential to obtain Andorran residency, which requires residing a minimum of six months a year in Andorra, which may or may not be continuous.
Two ways to establish in the Principality are to form a Limited Liability Company or LLC with a capital of at least 3000 €; or under the figure of “residence for professionals with international projection”, ideal for those who have commercial activities outside the Andorran territory, statute where “youtubers”, influencers or similar would also enter.
If you are interested in changing your tax residence to Andorra, we recommend reading the report “The definitive guide to live in Andorra”. For any questions you can contact us without obligation.