New rules of taxing winnings from games of chance since 2024
Effective since 2024, the Income Tax Act has been amended with regard to taxation of income from gambling. Under the amendment, winnings from lotteries and raffles are only tax-exempt where the individual winning is below or of CZK 50,000. The total annual difference between winnings and stakes is considered in other types of games of chance. If that difference exceeds the threshold of CZK 50,000, the income is taxable and has to be disclosed in a tax return.
The new rules are as follows:
- Lotteries and raffles: Each individual game is tax-exempt, if it is below or of CZK 50,000. Winnings above this threshold are subject to withholding tax at 15%, which is automatically withheld by the operator when paying the winning.
- Other games of chance (e.g. bets, gaming machines, tournaments, etc.): The annual difference between total winnings and stakes is considered separately for each type of game. Where this difference is higher than CZK 50,000, the income is subject to individual income tax.
The Financial Administration draws attention to changes in taxation effective since 2024 on their website, also due to the current deadlines for filing tax returns for 2024. The data available include summarised information, including real-life examples.
The above facts are a general summary, which is not intended to replace an opinion of a tax advisor. Please feel free to contact us, if you need detailed information. We are ready to help you.
Michalela Kozminská
kozminska@clarksonhyde.cz
