Tax authorities catch up with gamblers

Game over for online gamblers, who are pocketing large sums of money on the sly. From July 1, they’ll have to pay the piper. From now on, online winnings from abroad, whatever their form and nature, will be subject to a compulsory withholding tax on behalf of the Treasury at a flat rate of 30% (Article 73-II-G-9 of the CGI, the General Tax Code), a deduction to be made by credit institutions and similar bodies or any other entity involved in the payment of foreign-source winnings.

The amount deducted at source (Article 160 ter) must be paid to the General tax Directorate on a monthly basis, before the end of the month following that in which the deduction was made (article 174-VII of the CGI). This payment must, of course, be made electronically, in accordance with a model drawn up by the tax authorities.

In addition, before March 1 of each year, the entities responsible for paying out winnings to beneficiaries are required to file an electronic declaration with the tax authorities for foreign-source winnings generated online and paid to resident beneficiaries, stating their identity, the gross amount of winnings paid and the amount of withholding tax due (Article 154 quater), enabling tax authorities to monitor financial flows generated by games of chance. If the declaration does not include the required information, the penalties provided for in Article 230 bis will apply, depending on the impact of the omission.

Other sanctions come into force on July 1. These are the measures provided for by articles 186 and 208 of the CGI in the event of rectification of the tax base or late payment. Article 186-A of the CGI provides for an increase to 30% of the 20% surcharge applicable in the event of rectification of the tax base against institutions required to withhold tax at source on this category of gains.

In addition, the procedure for automatic taxation is activated when the establishment responsible for paying out winnings fails to file a compulsory annual declaration. Still concerning the subject of tax obligations, these entities are subject to surcharges based on the amount of tax withheld or which should have been withheld, in the event of failure to file or filing late. Increases are also applied if the declaration is incomplete or contains inconsistencies.

Hassan EL ARIF